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Full text of "1795-1895. One hundred years of American commerce ... history of American commerce by one hundred Americans, with a chronological table of the important events of American commerce and invention within the past one hundred years"

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Entered according to Act of Congress, in the year 1895, by 

D. O. Haynes & Co, 
In the office of the Librarian of Congress, at Washington. 




This volume illustrates the dignity of labor, the beneficence of liberty, and the 
triumphs of invention. It is an epic on the marvels of intelligent work. The 
wonders of the material development of the most remarkable of the centuries of 
recorded time are exhibited in this gallery of pen-pictures. They are the word- 
paintings of artists, each eminent in his own department of beneficent industry. It 
is an American story; but the United States is the most conspicuous illustration and 
example of the nineteenth century and its results. Peace and free institutions have 
furnished the opportunity for individual efforts. States constructed, cities founded, 
wildernesses settled, and vast populations prosperous in varied industries are the rich 
contributions of our country to the world's progress in the past hundred years. 
Capital and labor have caused and shared this creation of power and production, 
and this volume, which is an encyclopedia of industrial development for a century, 
written by business men, is appropriately dedicated to the business men of America. 

C. M. D. 


The evolution of an idea is always interesting. In submitting to the public this history 
of American commerce, an explanation of the causes in which it had its inception may most 
properly premise a review of the finished work. The present year marked for the oldest 
commercial paper in America, the " Shipping and Commercial List and New York Price Cur- 
rent," the completion of one hundred years of useful existence. In seeking some method of 
celebrating the centennial in a manner worthy at the same time of the paper and of the busi- 
ness interests of the country, the present idea was evolved. It was decided that in no better 
way could service be rendered to the American commercial community than by gathering 
together in compact form the interesting facts of its remarkable development. At first the 
intention was to present this history in a centennial edition of the paper, and upon this plan 
the work was begun. Then, as in the end, the plan contemplated the publication of one 
hundred chapters, written by one hundred men representing the great lines into which our 
trade and industries had been developed and specialized in recent years. The suggestion of 
such a work met with most generous welcome in the business world. Its need was recognized 
at once, and its novelty and value elicited eminent aid. The very success of the idea compelled 
the changing of the original plan. In the form of a newspaper publication the work would 
have lacked permanence and breadth of scope. It seemed almost unfair to interest representa- 
tive men throughout the country, who would bring enthusiasm, ability, and experience to the 
work of describing the industries of the country, and then to place upon them limitations of 
space within which they could do justice neither to themselves nor to their subjects. More- 
over, it was not solely as a newspaper centennial that the event was of importance ; it had a 
deeper and more extended historical significance. Like the " Shipping and Commercial List" 
itself, the centennial to be celebrated was but the natural outcome of a great event in the 
history of our establishment as a nation. 

In the year 1795 there was ratified by the Senate of the United States, and formally 
approved by President Washington, a treaty of amity, commerce, and navigation with Great 
Britain. This treaty, negotiated by John Jay, of New York, as envoy extraordinary, secured 
to this country a commercial liberty commensurate with its position of national independence, 
as recognized in the treaty of peace twelve years before. It conceded the actuality of the 
national existence, and implied conviction as to its permanence. Above all, it averted the 
almost certain disaster of a war, then imminent, between the two countries. The confidence 
it inspired in the business world by its recognition of this country as a treaty power, and 


the immediate advantages it brought to our commerce, are shown in the fact that the foreign 
trade of the United States almost doubled in the single year following its making. Arranged 
at a time when the American people were smarting under a sense of bitter wrong inflicted 
by Great Britain, the many advantages obtained by the Jay treaty were not, at first, fully 
appreciated. Political partizanship attacked it blindly, and the great party then clamoring for 
an alliance with France denounced it fiercely. In its support, the calmer counsels of such great 
statesmen as Washington and Hamilton, representing the conservative and substantial elements 
of the nation, finally prevailed, and the treaty was adopted. Time has too fully demonstrated 
the wisdom of this action to make necessary a further discussion of the long-since-refuted 
arguments by which the consummation of the treaty was opposed. The era it ushered in was 
for the nation one of progress and prosperity unprecedented. 

The opportunity to celebrate the centennial of our oldest commercial paper as well as that 
of our country's commercial progress naturally spurred us on to the highest possible attain- 
ment. It was determined to have nothing ephemeral or meretricious about the publication, and 
to make it, not a newspaper issue, but a standard book of reference, prepared under the best 
literary guidance and made with the best mechanical skill. The opportunity was in every way 
worthy of the undertaking, for in addition to the commemoration of commercial liberty there 
was demanded a permanent and authentic record of the results accomplished through this 
liberty. Properly produced, such a history of American commerce would not only do long- 
delayed justice to the memory of the patriots of one hundred years ago, but would apprecia- 
tively recognize the men who by their industry and genius have aided in the industrial advance 
of this country, and would provide for the present and the future a source of inspiring and 
stimulating knowledge of the grandeur of American achievement. It was to this end that this 
history of American commerce, as it now appears, was undertaken, and in this spirit the work 
has been carried on throughout. The incentive and the material were at hand, and the men 
whose influence had directed our commercial activities in the crowning years of the century were 
still here to aid in making the work authentic and complete. 

These considerations were presented to Hon. Levi P. Morton, Governor of the State of New 
York, and to Dr. Chauncey M. Depew. Governor Morton at once accepted the assignment of 
" American Banking," and Dr. Depew generously consented to edit the entire work. From 
this time the success of the undertaking was assured. The merits of the plan impressed the 
leaders in other lines of industry, and the most generous cooperation followed. In choosing 
the men to contribute the various articles, the editorial committee, to whom was delegated the 
authority of selection, considered but one question : Was each fitted by ability and experience 
to represent the industry with which he was identified ? No other question entered into the 
matter. Political considerations were especially avoided. The work was to be simply a 
magazine of facts collated by men who knew their significance, and made interesting with the 
vitality of actual experience, — a book about business, by business men, for business men, — a 
record of events in the departments of enterprise and production, with such reference to causes 
and conditions as should be necessary to describe intelligently those events. 

If the need of such a history was understood before, it certainly became more impressive 
as the work upon the book progressed. For a century the commercial history of the United 
States had remained unwritten, and records such as the compiler of political and universal 


history finds preserved for his reference, were not obtainable for a work of this character. They 
were scattered, incomplete and often conflicting, through every conceivable channel, from the 
old ledger entries of long-forgotten firms to the modern monographs in the files of periodical 
publications. The wisdom of dividing the work into one hundred chapters written by one 
hundred contributors now received corroboration anew. Upon no other plan could the data 
essential to the work have been gathered ; nor by any other means could the publication have 
obtained that historical accuracy and standard of authenticity which a work of this kind must 
possess to have permanent value. No one historian, however industrious or versatile, could 
have written " One Hundred Years of American Commerce." Only by the cooperation of the 
leaders in every branch of industry treated could the desired results have been obtained, and it 
is here due to the writers of this book to state that, chosen as they have been from the ranks 
of the busiest men of to-day, they have still found time cheerfully and ably to cooperate for 
the patriotic purposes of this history of American commerce. In order that the reader may 
understand something of the plan upon which the work was written by these contributors, 
we quote from the first letter of suggestions sent out by the editorial committee in charge 
of the work : 

" As to the character of the work. In the varied individuality of style, naturally resultant 
upon so many contributors, we hope to escape that dullness of machine-made history which 
keeps so many otherwise useful volumes unread. Therefore upon every contributor we would 
impress the fact that he should not sacrifice his personal style or preferences. It is not the 
encyclopedic knowledge of the pedant that the world wants to-day. It is the living acquain- 
tance with men and things, causes and effects, that shall show what is and the promise of what 
is to be. The information that every successful man has of his own business is of greater value 
than the statistics of the records. In our work we desire to bring the man and the records 
together, and to have him show the meaning of the records in the light of his personal and 
practical knowledge. Is this to be a statistical or a descriptive work? is an important question 
that has been asked. Are the articles to be nearly all statistics, and is the progress in the 
various lines to be shown by figures or by words? The answer is that this is to be both a 
statistical and a descriptive work; but the statistics are to be subordinated to the description, 
or not used at all unless they are necessary to the description. Description without statistics 
would have no force ; statistics without description would be meaningless to many. The union 
of the two in the hands of men who know the significance of the statistics they cite will give 
these articles their interest and weight. In dealing with branch or allied subjects pertinent to 
the article under discussion, contributors are recommended merely to summarize the cognate 
subject briefly and with special reference to its application. There are so many ramifications of 
every great industry that to attempt to follow more than the main story would be impossible. 
To conform to the centennial feature of the work, it has been decided to limit the number of 
chapters to one hundred. A history of ' one hundred years of American commerce, in one 
hundred chapters, by one hundred Americans,' has the ring of a slogan of success. And the 
men in charge of this work will keep constantly before their minds not only the making of the 
work, but the making it of such a nature that business men will not only need but want it. A 
strong, accurate, and true record, as well as an attractive one, is the aim." 

The policy persistently observed has been studiously to refrain from interfering with either 


the style or method of treatment by which each writer has stamped his own individuality upon 
his work. The editors have attempted no greater uniformity than that which was necessary to 
prevent extended and useless duplication in allied subjects. If, therefore, the reader of this 
book finds that its chapters are not always uniform in length or treatment, he is but noting the 
differences which must exist in literary work among one hundred men. In these very differ- 
ences exists one of the most interesting and most effective phases of the history. In presenting 
the book herewith it is only necessary to add that each article bears the trade-mark of its 
quality in the signature of its contributor. When it is further recalled that actual personal 
knowledge covering from one half to two thirds of the century under discussion, and directly 
received but hitherto unpublished oral tradition concerning the remainder, are possessed by the 
majority of the relators, the present work has had sufficient testimony to its worth. The figures 
accompanying each article are such as are deemed the most authentic, and have been derived 
from every available source. In the frequent preference given to the reports of the United 
States census the writers have taken the stand that, however imperfect these may have been 
found in certain particular instances, they are still, taken collectively and with due regard to 
their official nature, the soundest basis for comparisons covering extended periods. Where 
particular trades have preserved their own records, and these have been considered reliable, 
figures have been based upon them, while in other instances special statistics personally 
compiled by the writer have been given. In all these cases the figures given are considered 
the most authentic by the writers, and this judgment by them must be the support for 
their accuracy. 

The method pursued in dividing the work into its one hundred chapters so as both to 
comprehend and to distinguish all the great factors in the industrial activities of the country 
will be apparent upon examination of the Table of Contents. Beginning with great national 
interests, as banking and interstate commerce, the classification follows through the great 
corporate subdivisions of industry, — as the telegraph, ship-building, newspapers, — then through 
the products of the earth — as cotton, rice, and sugar — and our natural resources, — as mines, 
live stock, etc., — and so on down through the long list of manufactures in which the genius of 
America has been shown, to the mercantile activities comprised under the various trades. The 
chapter numbered XCIX, " Other Industries," was introduced to provide representation for 
other more or less important industrial factors not elsewhere treated. 

The editorial management of the history, under Dr. Depew, has been conducted by Mr. 
Thomas C. Quinn. Of the associate editors whose work deserves mention are Mr. Wesley W. 
Pasko, Mr. William Douglas Willes, and Mr. Charles Frederick Stansbury. Mention should 
be made also of the work of Mr. John Winfield Scott, whose wide acquaintance and patriotic 
labors did much toward making possible the final successful result. For the typographical 
excellence of the book-maker's art evidenced in this volume, credit is due to the De Vinne 
Press, to whose reputation for elegance and fine work little can be added. The art work of 
the history was placed in charge of the artist William C. Smith, of whose skill many of the 
portraits in this work give evidence. The engraving of the portraits drawn by Mr. Smith, as 
well as the reproduction of the other portraits, was done by the Gill Engraving Company. 
Words of recognition are also due to the L. L. Brown Paper Company, of Adams, Mass., for 
their care in the manufacture of the hand-made paper for the authors' edition of the history. 


One result of the work upon this history which was not directly foreseen when the project 
was conceived has been the setting aside of December 19th as " Commercial Day," in honor of 
the centennial of American commercial liberty, and in recognition from year to year hereafter 
of the beneficent results of American industry and enterprise which this history of American 
commerce both demonstrates and commemorates. The idea of this celebration came to Dr. 
Depew through his editorial work on this history. His suggestion of Commercial Day has 
already been taken up throughout the country. The Chamber of Commerce and the Board of 
Trade of New York led off in the movement. In the resolutions passed by the Chamber of 
Commerce their leadership in the promotion of Commercial Day was most strikingly justified 
by allusion to the fact that it was the solid men of New York, as represented by the Chamber 
of Commerce one hundred years ago, who, uninfluenced by partizan clamor, came to the assis- 
tance of President Washington in securing calmer consideration for the Jay treaty. Commercial 
Day this year will be celebrated with a banquet in New York at Delmonico's, given under the 
auspices of the editors and contributors to this history of American commerce, and to which 
have been invited representative business men in all lines of industry and from all sections of 
the country. Chambers of Commerce and Boards of Trade throughout the country, following 
the example set by New York, will commemorate the day with appropriate exercises. From 
1895, the centennial of American commercial liberty, will date Commercial Day, devoted to 
the interests of American trade and to renewing from year to year the vigor of our national 
patriotism and enterprise. 

In the closing days of the work on this history the painful news of the death of Mr. 
Frederic Gunther was received. Only a few days before his death Mr. Gunther had revised 
the proof of his article on the fur trade for the history. This contribution from his experience 
will remain to testify to his ability and the success of his business career. 

We must finally express our deep sense of obligation to the one hundred Americans who 
have cooperated in the production of this history, and to whose enthusiasm, experience, and 
ability it Is a lasting monument. That our part has been done in a manner which shall be 
considered worthy of them and of the commercial interests of our country is the highest praise 
for which we hope. 

The Publishers. 

December 10, 1895. 








Levi P. Morton, Governor of the State of New York . 


. Carroll D. Wright, LL.D., Washington, D. C, 

United States Commissioner of Labor ii 

. WORTHINGTON C. FoRD, Washington, D, C, 

Chief United States Bureau of Statistics 20 

. Edward A. Moseley, Washington, D. C, 

Secretary Interstate Commerce Commission 25 

5 THE POSTAL SERVICE IN COMMERCE . Thomas L. James, New York, 

President Lincoln National Bank, and Ex- Postmaster- General 33 

6 OUR MERCHANT MARINE . , . . Eugene T. Chamberlain, Washington, D. C, 

United States Commissioner of Navigation 38 


President The Bradstreet Company 42 

Col. William Jay, New York 



10 ONE HUNDRED YEARS OF NEW YORK COMMERCE, General Horace Porter, LL.D., New York 55 

Alexander E. Orr, New York, 

President New York Chamber of Commerce 50 


Flint Eddy ^^ Co., Merchants 63 

12 WALL STREET .... 








John P. Townsend, LL.D., New York, 

President Bowery Savings Bank 67 

Francis Wayland Ayer, Philadelphia, N. W. Ayer b' Son 76 

Henry H. Hall, New York, Hall d^ Henshaw . 84 

Sheppard Homans, New York, 

First President Actuarial Society of America, and 
Corresponding Member Lond. Inst, of Actuaries 91 

Stuyvesant Fish, New York, 

President Illinois Central Railroad 98 

James McMillan, Detroit, 

United States Senator from Michigan 113 

Charles H. Cramp, Philadelphia, 

President William Cramp bf Sons 

Ship and Engine Building Co. 119 
General Thomas T. Eckert, New York, 

President Western Union Telegraph Co. 12$ 




20 THE TELEPHONE John E. Hudson, Boston, 

President American Bell Telephone Co. 133 




24 AMERICAN THEATERS Albert M. Palmer, New York, /Vw/m/br /'a/w<fr'j r/4^a^^r 157 


Levi C. Weir, New York, 

President Adams Express Company 137 

Herbert H. Vreeland, New York, 

President Metropolitan Traction Company 141 

Hiram Hitchcock, New York, 

Hitchcock, Darling &= Co., Proprietors Fifth Avenue Hotel 149 

. General Charles H. Taylor, Boston, 

Editor and Managing Proprietor Boston Globe 166 


Publisher and Proprietor The Iron Age 1 74 

27 AMERICAN MINES Richard P. Rothwell, New York, 

Editor The Engineering and Mining Journal 178 



. Redfield Proctor, Proctor, Vt., 

United States Senator from Vermont 1 88 

. Francis G. duPont, Wilmington, Del 192 

30 AMERICAN LUMBER Bernhard E. Fernow, Washington, D. C, 

Chief Division of Forestry, U. S. Department of Agriculture 196 

31 PETROLEUM: ITS PRODUCTION AND PRODUCTS, Henry C. Folger, Jr., A. M., LL.B., New York, 

Standard Oil Company 204 



. George E. Morrow, Stillwater, Oklahoma, 

President Oklahoma Agricultural and Mechanical College, 

and Director Agricultural Experiment Station 215 
. Lazarus N. Bonham, Oxford, Ohio, 

Ex-Secretary Ohio State Board of Agriculture 220 

34 AMERICAN COTTON Richard H. Edmonds, Baltimore, 

Founder and Editor Manufacturers' Record 23 1 

35 AMERICAN WOOL William Lavi^rence, A. M., LL.D., Bellefontaine, Ohio, 

President National Wool Growers'' Association, and 

President Ohio Wool Growers'' Association 236 
. Alfred Henderson, New York, /V/^r Zi^ifwo^^-rj^w cSt^ Ci?. . 248 


37 AMERICAN SUGAR . . . . 

38 AMERICAN RICE . . . . 










John E. Searles, New York, 

Secretary and Treasurer American Sugar Refining Company 257 

John F. Talmage, New York, Dan Talmage's Sons 


Charles A. Pillsbury, Minneapolis, 

Pillsbury- Washburn Flour Mills Company 266 

James Gillinder, Philadelphia, 

President Gillinder fir" Sons, Incorporated 274 

John Moses, Trenton, N. J., 

President The John Moses <Sr» Sons Company 285 

Emerson McMillin, New York, Emerson McMillin &^ Co. 295 

Warner Miller, Herkimer, N. Y., 

Herkimer Paper Company 302 

John W. Harper, New York, Harper <y Brothers . . 308 

Theodore L. De Vinne, New York, The De Vinne Press 314 

Charles Huston, Coatesville, Pa., 

President Lukens Iron and Steel Company 320 

Alfred A. Cowles, New York, 

Vice-President Ansonia Brass and Copper Company 329 






Alba B. Johnson, Philadelphia, Baldwin Locomotive Works 337 

49 MACHINERY MANUFACTURING INTERESTS, William Sellers, Philadelphia, 

President and Engineer William Sellers &" Co., Incorporated 346 


Vice-President McCormick Harvesting Machine Company 352 

51 STOVES AND HEATING APPARATUS . . Jeremiah Dwyer, Detroit, 

President Michigan Stove Company 357 


Presidents. L. Mott Iron Works 364 

William H. Jackson, New York, 

President Jackson Architectural Iron Works 371 


54 ELECTRICAL MANUFACTURING INTERESTS, Thomas Commerford Martin, New York, 

Editor The Electrical Engineer 377 



















Philip D. Armour, Chicago, Armour &=• Co. 

■ 383 

Eugene G. Blackford, New York, 

Ex- Commissioner of Fisheries 389 

Edward S. Judge, Baltimore, 

Editor The Trade, and Secretary National 

Association of Canned Food Packers 396 
Charles Carpy, San Francisco, 

President California Wine Association 401 

James E. Pepper, Lexington, Ky., Jaities E. Pepper 6r' Co. . 407 

Fred Pabst, Milwaukee, President Pabst Brewing Co. . 413 

Pierre Lorillard, Junior, New York, 

President P. Lorillard Company 418 

Samuel Colgate, New York, Colgate 6^ Co. 


Henry Bower, Philadelphia, 

Henry Bower &f Son, Manufacturing Chemists 429 

William P. Thompson, New York, 

President National Lead Company 433 

Henry G. Piffard, A.M., M.D., New York, 

President Genesee Salt Company 442 

Frank A. Kennedy, Cambridge, Mass., 

Kennedy's Branch, New York Biscuit Company 446 

Thomas R. Chaney, New York, 

President American Cotton Oil Company 451 

Thomson Kingsford, Oswego, N. Y., 

President T. Kingsford dr' Son 456 

Ohio C. Barber, Akron, Ohio, 

President The Diamond Match Company 460 

Robert Maclay, New York, 

President Knickerbocker Ice Company 466 

James W. Tufts, Boston, 

President American Soda Fountain Company 470 

S. N. Dexter North, A.M., Boston, 

Secretary National Association of Wool Manufacturers 475 



73 AMERICAN CARPETS Sheppard Knapp, New York, Sheppard Knapp 6- Co. . 485 






Benjamin C. Clark, Boston, Pearson Cordage Company . 489 
Robert H. Foerderer, Philadelphia .... 494 

Charles L. Johnson, New York, 

Secretary United States Rubber Company 498 

Henry Burn, New York, 

President National Wall Paper Company 505 

William Steinway, New York, President Steinway &" Sons. 509 

79 AMERICAN CARRIAGE AND WAGON WORKS, Chauncey Thomas, Boston, Chauncey Thomas df Co. . 516 







Willis B. Marvin, New York, Marvin Safe Company . 521 

Frederick G. Bourne, New York, 

President The Singer Manufacturing Company 525 

Edward Howard, Boston, 

Founder The E. Howard Watch and Clock Company 540 

Clarence W. Seamans, New York, 

Wyckoff, Seamans &" Benedict 544 

Albert A. Pope, Boston, 

President Pope Manufacturing Company 549 

. John N. Beach, New York, Tefft, Weller &f Co. . . 554 

86 THE CLOTHING AND FURNISHING TRADE, William C. Browning, New York, Browning, King 6^ Co. 561 

87 THE BOOT AND SHOE TRADE . . . William B. Rice, Boston, Rice &= Hutchins . . .566 

88 THE HARNESS AND SADDLERY TRADE . Albert Morsbach, Cincinnati, 

President National Wholesale Saddlery Association 575 

89 THE FUR TRADE F. Frederic Gunther, New York, C. G. Gunther's Sons . 579 

90 THE JEWELRY TRADE .... Charles L, Tiffany, New York, President Tiffany &i' Co. 589 

91 THE GROCERY TRADE .... James E, Nichols, New York, Austin, Nichols &' Co. . 595 

92 THE FRUIT TRADE John W. Nix, New York, John Nix <5^ Co. 

93 THE DRUG TRADE John McKesson, New York, McKesson &= Robbins 

94 THE PAINT, OIL, AND VARNISH TRADE . Daniel F. Tiemann, New York, D. F. Tiemann 6r» Co. . 620 




Albert F. Hayward, Boston, 

President and Treasurer Fobes, Hayward Ss' Co . 625 





George W. Gay, Grand Rapids, Mich., 

Treasurer Berkey &' Gay Furniture Company 628 

Edward C. Simmons, St. Louis, 

President Simmons Hardxvare Company 633 

John G. Bainbridge, New York, Henry Bainbridge &> Co. 642 

Albert Clark Stevens, New York, Editor Bradstreet's . 648 

Chauncey M. Depew, LL.D., New York .... 675 








29 JOHN E. HUDSON . . 

36 LEVI C, WEIR .... 

















. 117 


. 224 

. 124 


• 232 

. 128 


. 241 

• 135 


. 252 

. 138 


. 260 

• 145 


. 264 

• 152 


. 269 

. i6i 


. 276 

. 168 


. 289 

. 176 


. 296 

. 181 


• 304 

. 188 


. 308 

. 192 


. 200 


• 325 

. 209 


. 332 

. 216 

CHAUNCEY M. DEPEW, LL. D. Frontispiece 








357 O. C. BARBER . . 



380 S. N. D. NORTH . 





408 HENRY BURN .... 









JOHN N. BEACH . . . 
JOHN W. NIX .... 








Second Year, President Washington's Second Term. 

President, George Washington, Virginia. 
Vice-President, John Adams, Massachusetts. 
Secretary of State, Edmund Randolph, Virginia. 
Secretary of the Treasury, Alexander Hamilton, New York. 
Secretary of War, Henry Knox, Massachusetts. 
Postmaster-General, Timothy Pickering, Massachusetts. 
Attorney-General, William Bradford, Pennsylvania. 
Speaker of the House of Representatives, F. A. Muhlenburg, 

Secretary Hamilton announced his redemption policy, Jan. 15. 

Jacob Perkins, of Newburyport, Mass., patented a machine 
for cutting and heading nails, Jan. 16. 

Secretary Hamilton resigned, and Oliver Wolcott, of Con- 
necticut, succeeded him, Jan. 31. 

Federal money first reckoned by decimal system of dollars, 
cents, and mills, Feb. 5. 

Joseph Habersham, of Georgia, appointed Postmaster-Gen- 
eral, in place of Timothy Pickering, resigned, Feb. 25. 

National flag established with fifteen alternate red and white 
stripes, and a blue union with fifteen white stars. May i. 

Jay Treaty ratified by the Senate, June 24 ; ratifications 
exchanged between the two countries, Oct. 28 ; formally an- 
nounced by President Washington to the House, December. 

The United States agreed to pay annual tribute to the Dey 
of Algiers to secure exemption from pirates, Sept. 5. 

Spain conceded the free navigation of the Mississippi River, 
and the Floridaboundaries were established, Oct. 27. 

Charles Lee, of Virginia, appointed Attorney-General, in 
place of William Bradford. 

Timothy Pickering appointed Secretary of State vice Ed- 
mund Randolph, resigned, Dec. 11. 

First issue of the New York Prices-Current, now the Ship- 
ping and Commercial List and New York Price-Current, 
Dec. 19. 

£tienne Bor^ developed an improved method for the extrac- 
tion of sugar from the cane. 


Tennessee admitted to the Union, June i. 

John Fitch ran the first screw boat using steam power on 
the Collect, New York, August. 

French Directory refused to recognize the United States 
Minister, Charles C. Pinckney, of South Carolina, Sept. 11. 

Washington issued his farewell address, Sept. 17. 

Binny & Ronaldson established in Philadelphia the first 
permanent type-foundry. 

New York Insurance Company, the second in the country 
to take marine risks, incorporated. 

Major Isaac Craig and Colonel James O'Hara established 
the first glass-works in Pittsburg. 


John Adams inaugurated, March 4. 

Thomas Newbold of New Jersey patented first cast-iron 
plow, June. 
Yellow fever epidemic at Philadelphia and New York, Aug. 
French Directory issued decree against American commerce. 
Philadelphia Quakers petitioned Congress against slavery. 


Navy Department created. George Cabot first secretary. 

Congress suspended commercial relations with France, June. 

Alien and Sedition laws passed, July. 

First salt manufactory established in Ohio. 

Joseph Hopkinson wrote " Hail Columbia. " 

Imprisonment for debt to the United States abolished. 

First machine for making combs patented by Isaac Tryon. 

First American vessel launched on Lake Erie. 

First merino sheep brought from Spain by Hon. William 


Napoleon overthrew the French Directory, and commercial 
relations with this country were restored, August. 

George Washington died at Mount Vernon, aged 67, Dec. 14. 

The government paid 8 per cent, for a $5,000,000 loan. 

Yellow fever epidemic in New York. 

The Manhattan Company chartered in New York. 

First shipment of ice from New York to Charleston, S. C. 

Eliakim Spooner took out first patent for a seeding machine. 


Epidemic of yellow fever at Baltimore, August. 

War office and Treasury building at Washington burned, 

Congress first assembled at Washington, Nov. 22. 

General bankruptcy law passed, December. 

The Second Census gave the population of the country as 

United States first imported india rubber at Boston. 


John Marshall chief justice of the United States, Jan. 20. 
Thomas Jefferson inaugurated, March 4. 


Tripoli declared war against the United States, June lo. 
The federal judiciary reorganized. 
Quarantine established on Staten Island. 
First sheet-copper turned out from Paul Revere's mill at 
Canton, Mass. 

Congressional Library established. 


West Point Military Academy established, March l6. 

Ohio admitted to the Union, Nov. 29. 

Process for making potato starch patented by John Biddis, 
of Philadelphia. 

First important powder-works established by Eleuthere I. 
du Pont. 

Philadelphia Chamber of Commerce established. 

Abel Porter & Company commenced the manufacture of 
gilt buttons in Connecticut. 


Louisiana purchased from France for $15,000,000, Apr, 30. 

Richard French and J. T. Hawkins patented the first con- 
trivance for reaping machines. May 17. 

First cotton mill established in New Hampshire. 

Crawford built the first tavern in the White Mountains for 
summer tourists. 

First bank established in Cincinnati. 


Lewis and Clark started to explore the Northwest, March. 

Machine-embroidering introduced by John Duncan, May. 

New Jersey's slaves freed, July 4. 

The Burr-Hamilton duel at Weehawken, N. J., July II. 

Chicago first settled as a trading post by John Kinzie. 

National Bankruptcy Act repealed. 

Middlesex Canal completed between Boston and the Con- 
cord River. 

The manufacture of white lead begun by Samuel Wetherill 
in Philadelphia. 

Captain John N. Chester imported the first bananas. 

Almy & Brown of Providence, R. I., made first consign- 
ment for sale of American cottons to Elijah Warren of Phila- 


Peace with Tripoli, June 3. 

Robert Fulton originated the marine torpedo. 

First cargo of ice for export shipped to Martinique by 
Frederick Tudor. 

First drove of cattle on the hoof for the Eastern market 
crossed the Alleghanies. 

Printers' ink first manufactured here. 


England proclaimed the blockade of the European ports, 
June 16. 

France by Berlin decree proclaimed the blockade of Eng- 
lish ports, Nov. 21. 

The first cargo of r.nlhracite coal shipped to Philadelphia 
from the Pennsylvania mines. 

First confectionery factory established in New York by 

David Melville, of Newport, R. I., made earliest use of gas 
to light his house. 

First American saws manufactured by William Rowland, 
of Philadelphia. 


Aaron Burr's trial for treason began. May 22. 

Fulton's first steamboat, the Clermont, made the trip from 
New York to Albany, Aug. II. 

Aaron Burr acquitted, Sept. i. 

The Embargo passed by Congress, Dec. 22. 

Patent shot-tower of Paul Beck built on the Schuylkill. 

Eli Terry, of Plymouth, Conn., began the manufacture of 
clocks by machinery. 

Machine for the simultaneous cutting and heading of tacks 
patented by Jesse Reed, of Bridgewater. 

Shipment of ice from Boston to Havana commenced. 

Anthony Tiemann introduced the manufacture of colors. 

First wheat-starch factory started at Utica by Edward and 
John Gilbert. 


Importation of slaves forbidden, Jan. i. 

The Phcenix, built by John Stevens, of Hoboken, made first 
sea trip by steamboat, between New York and Philadelphia. 

American Fur Company founded by John Jacob Astor. 

First patent for stoves to warm by rarefied air granted to 
Daniel Pettibone, of Philadelphia. 

Bakewell and Page inaugurated the manufacture of flint- 
glass at Pittsburg. 

First queens ware made by Columbia Pottery Company at 


James Madison inaugurated, March 4. 

Embargo removed except to French and English ports, 
March 15. 

Cotton duck for sail-cloth first made in the United States. 

Abel Stowell, of Worcester, Mass., patented a machine for 
cutting screws. 

Discovery of Manhattan Island celebrated by a banquet at 
the old City Hotel, New York. 


The Third Census gave the population of the country as 

Peregrine Williamson, of Baltimore, made the first metallic 

Astoria, Oregon, founded by the Pacific Fur Company 
and John Jacob Astor. 

Kaolin discovered at Monkton, Vermont. 

Plan for cantaliver bridge across East River proposed by 
Thomas Pope. 

George Frederick Cooke, the English actor, inaugurated 
the star system in American theatres. 

Simmons and Rundel, of Charleston, S. C, patented a pro- 
cess for saturating water with " fixed air," producing a sort of 
soda water. 


The first steamboat left Pittsburgh for New Orleans via the 
Ohio and Mississippi rivers, Oct. 27. 

Gen. Harrison defeated Tecumseh at Tippecanoe, Ind., 
Nov. 7. 

Congress refused to recharter the Bank of the United States. 

First steam ferry-boat ran between Hoboken and New York. 

Wooden shoe pegs invented. 

Exports of flour exceeded 1,000,000 barrels for the first 


A ninety days' embargo proclaimed, Apr. 4. 

Louisiana admitted to the Union, Apr. 30. 


War declared against England, June i8. 
Engagement between the Constitution and the Guerri^re, 
Aug. 19. 
The first pin factory was established in New York. 
Pittsburgh started the first rolling-mill. 


Engagement between the Chesapeake and Shannon, June i. 

Commodore Perry's great Lake Erie victory, Sept. 13. 

Two New York men began the manufacture of hair-cloth at 
Rahway, N. J. 

First Brooklyn ferry ran. 

Stereotyping and printing from stereotype plates was 

First complete mill in the world for turning out raw cotton 
as finished cloth, established at Waltham, Mass. 

Illuminating gas apparatus patented by David Melville. 

Francis C. Lowell brought out the power-loom. 


Washington captured by the British, and public buildings 
and records burned, Aug. 25. 

Specie payment suspended, Sept. i. 

Delegates from New England States convened at Hartford, 
Conn., to devise defense against the British independently of 
the National Government, Dec. 15. 

Treaty of peace with England signed at Ghent, Dec. 24. 

Steel plate engraving invented by Jacob Perkins, of New- 
burjrport, Mass. 


Gen. Jackson defeated the British at New Orleans, Jan. 8. 
War against the United States declared by the Dey of Algiers, 

Commercial convention with England signed, July 3. 
Secretary of the Treasury Dallas proposed a protective tariff. 
Steam-power first applied to machinery for cabinet-making. 
The first steamboat ascended the Mississippi to Louisville. 


First savings-bank opened in America, at Philadelphia, No- 

Indiana admitted to the Union, Dec. 11. 

Lighting the streets with gas introduced at Baltimore. 

First Seminole war. 

Concessions granted by the Spanish government allowing 
shipment of ice to Cuba. 

Black-Bail packets, the first line, established between New 
York and Liverpool. 


United States National Bank opened again at Philadelphia, 

James Monroe inaugurated, March 4. 

Ground broken in construction of Erie Canal, July 4. 

Mississippi admitted to the Union, Dec. 10. 

Steam-power first applied to paper-making at Pittsburgh. 

Work begun by the United States Coast Survey. 

First Deaf and Dumb Asylum established at Hartford, Conn. 

Harper's publishing house founded. 

Gas employed in lighthouse illumination by David Melville. 

Thomas Gilpin & Co. operated the first cylinder machine 
for making paper at Wilmington, Del. 

Steam navigation began on Lake Erie. 


Congress established the flag with thirteen stripes, and a 
star for each State, Apr. 14. 

Illinois admitted to the union, Dec. 3. 

Western State banks suspended. 

Reed principle for musical instruments patented by Aaron 
Merrill Peasley. 

First line of steam packets on Long Island Sound between 
New York and New Haven. 

Elisha Mills began the packing industry at Cincinnati. 

First stage-coach over the Cumberland road to Wheeling. 

The internal revenue tax on whisky abolished. 

Du Pont powder-works destroyed by terrific explosion. 

First drove of western cattle brought to New York. 


Florida purchased from Spain for $5,000,000, Feb. 22. 

The first paper devoted to agricultural interests published 
at Baltimore, Apr. 2. 

The Odd Fellows organized at Baltimore, Apr. 26. 

Steamship Savannah started on first trans-Atlantic trip of 
steam-vessel. May 21, and arrived at Liverpool, June 20. 

Alabama admitted to the Union, Dec. 14. 

Seth Boyden began the manufacture of patent leather at 

The manufacture of porcelain from domestic materials was 
begun in New York by Dr. H. Mead. 

Great financial depression existed. 

First savings-bank opened in New York. 

John Conant of Vermont invented his cooking- stove. 

Plow with interchangeable parts patented by Jethro Wood. 

Ezra Daggett and Thomas Kensett put up the first canned 
goods in New York. 


Thomas Blanchard patented the gun-stock lathe, Jan. 20. 

Maine admitted to the Union, March 15. 

The Fourth Census gave the population of the country as 

Anthracite coal first used successfully for the generation of 
steam at Philadelphia. 

The first steamboat ran on Lake Michigan. 

First rubber shoes imported from South America. 

Daily meeting with regular call of stocks begun on 

The United States Pharmacopoeia established. 


Missouri Compromise adopted, Feb. 26. 

General Jackson took possession of Florida on behalf of 
the United States, July I. 

Missouri admitted to the Union, Aug. 10. 

New York quarantine station and hospitals established 
at Castleton, S. L, September. 

Sophia Woodhouse, of Wethersfield, Conn., patented the 
straw hat, Dec. 25. 

American Colonization Society secured Liberia, December. 

Bronze printing patented by George J. Newbury. 

Remains of Major Andre removed from Tappan, N. Y., 
to Westminster Abbey, London. 

The rotary steam-engine patented by Mr. Ward, of Colum- 
bia, S. C. 

The first college of pharmacy established at Philadelphia. 


Treaty of commerce and navigation concluded with France, 
June 24. 

The Merrimac Manufacturing Company started the city of 
Lowell, Mass., Sept. 3. 

Mason and Baldwin of Philadelphia began engraving cy- 
linders for calico printing. 

First patent of artificial teeth secured by C. M. Graham. 



Iron conduit pipes were first used in the Fairmount Water 
Works at Pliiladelphia. 

Thomas Skidmore of New York introduced India rubber 
tubes for gaseous fluids. 

Naval expedition sent against the West Indian pirates by 
United States. 

Lock coulter for plows patented by David Peacock of New 

Depau's line of Havre packets established. 

The first wheel mill for incorporating powder erected on 
Brandywine Creek, Del. 

Luke Davies opened the first store distinctively for men's 
furnishing goods. 


Monroe Doctrine promulgated, Dec. 2. European powers 
not to be permitted to interfere with the independent States 
of America, or to acquire dominion on this continent. 

First steam-power printing-press set up in Albany by a 
printer named Van Benthuysen. 

Champlain Canal, connecting the Hudson at Albany with 
Lake Champlain, opened. 

Manufacture and tin-plating of lead pipe for stills was 
begun in New York by Thomas Ewbank. 

The first smelting-works in the lead region of the upper 
Mississippi erected by Col. James Johnson of Kentucky. 

Nicholas Longworth of Cincinnati commenced the making 
of wine with the muscatel grape. 

First corporation for the manufacture of gas started as the 
New York Gas-Light Company with a capital of $1,000,000. 


Lafayette arrived at Staten Island on his visit to the United 
States, Aug. 15. 

The geological survey of North Carolina was begun by 
Denison Olmsted. 

Zadoc Pratt established a great hemlock tanning factory 
in Greene Co., New York. 

Cape Cod began to manufacture isinglass from hake. 

The first juvenile reformatory established in New York. 

Glazed-ground wall-papers were first made. 


John Quincy Adams inaugurated, March 4. 

Comer-stone of Bunker Hill Monument laid by Lafayette, 
June 17. 

Isaiah Lukins of Philadelphia patented the lithotritor in 
England, Sept. 15. 

First boats left Buffalo by the Erie Canal, Oct. 26. 

De Witt Clinton and the first boats arrived in New York 
via the Erie Canal, and a grand celebration took place in 
this city, Nov. 4. 

First performance of Italian opera at New York, Nov. 29. 

Isaac Babbitt, of Taunton, Mass., invented Babbitt metal 
and commenced the manufacture of Britannia ware. 

William Ellis Tucker commenced the manufacture of porce- 
lain at Philadelphia. 

The so-called labor movement first came into prominence. 

The circular saw brought out by Mr. Richardson of Phila- 

Taylor & Rich erected the first mahogany mill. 


Eli Whitney, inventor of the cotton gin, died, Jan. 8. 
New England Society for the Promotion of Manufactures 
and the Mechanic Arts chartered, March 3. 

Death of John Adams and Thomas Jefferson, July 4. 

First railroad with metal rails from Quincy, Mass., to tide 
water, three miles away, Oct, 7. 

James Oram, founder of the Shipping List and New York 
Price Current, died Oct. 27; born May 10, 1760. 

National Academy of Design founded in New York. 

Power-loom for weaving wire invented by John S. Gastrin, 
of New York. 

Manufacture of palm-leaf hats begun in Massachusetts. 

Ice first cut on Rockland Lake and retailed in New York. 

Failures of the great tea importers caused a heavy loss to 
the Government in customs duties. 

Composition rollers for printing presses first used. 

W. Kendall patented the insertable tooth for rotary saws. 


Switchback Railroad operating by gravity opened at Mauch 
Chunk, Pennsylvania, Jan. 8. 

First general convention of the manufacturing interests 
of the country held at Harrisburg, Pa., July 30. 

English artists introduced lithography at Boston. 

James McClintin of Chambersburg, Pa., invented the first 
practical contrivance for mortising and tenoning. 

The manufacture of wood type was begun at New York 
by Darius Wells. 

The first bell made from blistered bar steel in New York. 

Rope factories first applied steam as power at Wheeling. 

Sandwich Glass Company made first pressed glass. 

First drove of hogs entered Chicago. 

Stone for Bunker Hill monument quarried at Quincy. 

Harrison Gray Dyar constructed an electric telegraph on 
Long Island. 

Jacob Perkins built a compound stationary engine, using 
steam of 1400 pounds pressure. 


The American Institute organized, Feb. 19. 

Heavy duties laid on imported fabrics of cotton or wool. 
May 15. 

The first wool sale was held at Boston and brought $300,- 
000, June 10. 

First edition of Webster's American Dictionary published, 

First American power-loom for weaving checks and plaids 
patented by Rev. E. Burt, of Conn., August 19. 

Franklin Institute medal awarded Seth Boyden for first 
buckles and bits made of annealed cast iron, Oct. 16. 

First patent for locomotive issued to William Howard of 

Manufacture of varnish begun in New York by P. B. Smith. 

William Woodworth of Hudson, N. Y., invented the first 
machine for planing, cutting, tonguing, and grooving boards. 

Sea Island cotton first appeared in the market. 

The first trip-hammer shop for the manufacture of axes 
built by Samuel Collins, at Collinsville, Conn. 

Manufacture of horse collars begun by Timothy Deming 
at East Hartford, Conn. 

Carbondale Railroad, the first on which a locomotive was 
used, built. 


Andrew Jackson inaugurated, March 4. 

Safety Fund Banking Act passed in New York State, April. 

First annual fair at Castle Garden of the American Insti- 
tute of the State of New York, Nov. i. 

Hamilton Stewart began in Philadelphia the manufacture of 
damask table linen, December. 

Tin ore discovered at Goshen, Conn., by Prof. Hitchcock. 


The manufacture of sewing silk by machinery begun by 
James Conant at Mansfield, Mass. 

Dr. John M. Revere of New York perfected the process 
of galvanizing iron. 

First paper from grass and straw fiber made by machinery 
by G. A. Shryock, of Philadelphia. 

The Stourbridge Lion, the first locomotive ever run in this 
country, arrived from England. 


First American locomotive constructed by Peter Cooper for 
the Baltimore and Ohio R. R. 

Joseph Smith organized the first Mormon Church at Man- 
chester, N. Y., Apr. 6. 

The Welland Canal between Lakes Erie and Ontario com- 
pleted, Aug. 3. 

The City of Chicago was laid out, Aug. 4. 

The Fifth Census gave the population of the country as 

The first astronomical telescope was erected at Yale. 

Joseph Dixon began the manufacture of lead-pencils at 
Salem, Mass. 

First native Georgia gold came to the United States. 

The omnibus first appeared in the streets of New York. 

Windham, Conn., turned out the first Fourdrinier ma- 

The Baltimore and Ohio Railroad opened its first section 
operated by horse power. 

Holmes, Hotchkiss, Brown & Elton commenced the manu- 
facture of sheet brass at Waterbury, Conn. 

First locomotive constructed in the United States for actual 
service, the Best Friend, built at West Point Foundry Works 
for the South Carolina Railroad. 


The first train drawn by a locomotive ran on the South 
Carolina Railroad, Jan. 15. 

The Mohawk and Hudson Railroad opened in September. 

Discovery of chloroform announced by Samuel Guthrie, of 
Sackett's Harbor, N. Y., Oct. 12. 

The first four-wheel car trucks used on the South Caro- 
lina Railroad. 

Timothy Bailey of Albany invented the power-loom for 
stocking knitting. 

The Morris Canal opened, connecting Newark with the 
Delaware river. 

The West Feliciana Railroad, the first west of the Alle- 
ghanies, incorporated in Louisiana. 

The Baldwin Locomotive-Works established in Philadelphia. 

Pennsylvania inaugurated a system of internal improve- 
ments, consisting of 292 miles of canal and 126 of railroad. 


Asiatic cholera made its first appearance in New York, 
June 21. 

Commercial and financial distress, July to October. 

The first street-railway in the country opened in New York 
between City Plall and Fourteenth street, November. 

Davis & Gartner, of York, Pa., built three locomotives of 
the grasshopper pattern for the Baltimore and Ohio Railroad. 

The NuUification Ordinance passed by South Carolina. 

First hogs packed in Chicago by George Dole. 

Egbert Egberts, of Cohoes, brought out the power knitting- 

First cargo of Sicily oranges and lemons imported. 

Manufacture of table cutlery begun in this country. 

Use of tan-bark in manufacture of white lead introduced. 

First soda water apparatus manufactured by John Matthews 
of New York. 

Trowbridge, Dwight & Company established the Ayholesale 
clothing manufacture at New Haven. 

First shirt factory established by David & Isaac Judson in 
New York. 

Swiveling fore-end truck for locomotives introduced to gen- 
eral use. 


The first cargo of American ice was exported to India by 
Frederick Tudor, May. 

The " New York Sun " founded, Sept. 3. 

Government funds withdrawn from the Bank of the United 
States, October. 

The first company to import and breed cattle organized, 
Nov. 2. 

Commercial treaties were entered into with Austria, Tur- 
key, and the Two Kingdoms of Sicily. 

Treasury Building at Washington was burned. 

Obed Hussey patented and exhibited in Ohio the first practi- 
cal reaping-machine. 

Ross Winans built the first typical American passenger cars. 

The Roxbury India- Rubber Company, the first in the busi- 
ness, organized. 

Samuel Preston invented the pegging-machine. 

The crosshead pump for supplying feed-water to the boiler 
in locomotives introduced. 


New York National Guard called out for the first time in 
suppressing the anti-abolition riots, April. 

Cornelius M. Lawrence first mayor chosen by vote of the 
people in New York, May. 

Cyrus Hall McCormick patented his reaper, June 21. 

The first vessel arrived at Chicago from the lower lakes, 
July 12. 

Lathe for turning lasts patented, Dec. 25. 

First attempt at crushing the oil from cotton-seed made 
at Natchez. 

Screws were first made entirely by machinery. 

Rope-yarn spinner invented in New York. 

The first saw-mill in the Saginaw valley built by Harvey 

Half-crank locomotive driving axles introduced. 

The manufacture of door locks begun in Connecticut. 


New York voted to begin the Croton Aqueduct, March. 

Solyman Merrick, of Springfield, Mass., patented the first 
practical screw wrench, Aug. 17. 

Texas declared independence, Nov. 7. 

Great New York fire. Loss $20,000,000, Dec. 16. 

Chicago opened her first bank and organized a fire de- 

The first house was built on the site of San Francisco. 

Samuel Colt began the manufacture of the revolving pistol. 

The circular web knitting-machine invented in Connecticut. 

Horseshoes were first made by machinery by Henry Bur- 
den, at Troy. 

Improved methods of minting introduced from Europe by 
Franklin Peale. 

Pins first made by machinery in New York. 

Gas companies organized in Philadelphia and New Orleans. 

The "New York Herald" established.. 

TTie first furnaces made in New England by William A. 
Wheeler, of Worcester, Mass. 


Professor Morse exhibited his telegraph in the University 
of New York. 

First link in rail connection of New York and Boston formed 
by the opening of the Boston and Providence Railroad. 


President Nicholas Biddle secured, on Feb. 13, a charter 
from the State of Pennsylvania for the Bank of the United 
States, the Federal charter of which expired March 30. 

Arkansas admitted to the Union, June 15. 

Specie Circular issued, July il. 

First patent of friction match granted Alonzo D. Phillips, 
of Springfield, Mass., Oct. 24. 

United States Patent Office and contents burned, Dec. 15. 

The manufacture of fine-cut chewing tobacco by machinery 
commenced at Centreville, Miss. 

Brigham Young was elected president of the Mormons. 

First sleeping-car ran on the Cumberland Valley Railroad. 

First transatlantic cotton freight steamship built for Savan- 
nah merchants. 

The first cargo of wheat shipped on Lake Michigan for 

Astor House opened in New York. 

First American patent issued for a typewriting machine. 

E. R. Campbell patented the coupling together of two pairs 
of locomotive driving-wheels. 

Rubber belting patented. 

Power presses introduced for magazine and newspaper 

James Atwater, of New York, brought out the illuminated 
case stove. 

J. & L. K. Bridge imported from Sicily the first cargo of 


Fire at Charleston, S. C, Apr. 27, destroyed 1158 buildings. 

Michigan admitted to the Union, Jan. 26. 

Martin Van Buren inaugurated, March 4. 

Suspension of banks and general panic, May 10. 

Sub-treasuries recommended by President Van Buren, 
Sept. 4. 

Pitts Brothers patented the combined threshing and clean- 
ing-machine, Dec. 29. 

Chicago incorporated as a city. 

Capt. John Ericsson successfully applied the screw pro- 
peller to steam vessels. 

The fancy weaving loom was patented by William Crompton. 

Canning of com commenced at Philadelphia by Thomas B. 

Counterbalance weights introduced for locomotive driving- 


Fire at Charleston, S. C, Apr. 27, destroying 1 158 buildings. 

The Specie Circular repealed. May 31. 

Congress constituted every railroad a postal route, July 7. 

Capt. Charles Wilkes started on his South Sea explora- 
tions, Aug. 18. 

The National Silk Society organized at Baltimore, Dec. II. 

First New Jersey zinc ores smelted at Washington. 

Branch United States mint established at Dahlonega, Ga. 

The Smithsonian Institution founded in Washington. 

Solid pin heads first manufactured at Birmingham, Conn. 

Dimond Chandler began the manufacture of gold spectacles 
and silver thimbles at Longnieadow, Mass. 

Elisha H. Root, of Collinsville, Conn., invented the first 
machine for punching and making the eyes of axes, hatchets, 
and hammers. 

First shipment of wheat from Chicago. 
David Bruce, Jr., invented the type-casting machine. 
First tiles made by Abraham Miller at Philadelphia. 
Steam introduced in heating processes in sugar-refining. 


The first express started by W. F. Harnden between New 
York and Boston, March 4. 

The United States Bank, rechartered by the State of Penn- 
sylvania, failed, Oct. 10. 

John William Draper, professor of chemistry in University 
of New York, took the first photograph from life, November. 

Hot-water heating introduced at Niblo's conservatory. 

The ice-plow invented. 

First pottery built at East Liverpool, O. 


Adams Express commenced between New York and Bos- 
ton, May 4. 

First successful iron-furnace with anthracite and hot-blast 
fired by David Thomas at Catasauqua, Pa., July 4. 

Steamship Britannia, the first Cunard liner, left Liverpool 
for New York, July 4. 

The Sixth Census gave the population of the country as 

The first castings for structural iron made. 

John Ames, of Springfield, Mass., patented the first machine 
for making, ruling, and cutting paper. 

Henry Disston commenced the manufacture of saws. 

Patent for the electric telegraph issued to Professor Morse. 

Jonas Chickering patented the grand piano with full iron- 

First advertising agency opened in Philadelphia by Volney 
B. Palmer. 

The manufacture of blasting-powder begun. 

Edwin Hodges built first brass-wire-drawing mill at West 
Torrington, Conn. 

The American buggy first came into general use. 

A walking-beam electric engine constructed by Davis & 


William Henry Harrison inaugurated, March 4. 
President Harrison died and Vice-president Tyler suc- 
ceeded him, Apr. 4. 

First edition of Horace Greeley's Tribune, Apr. 10. 

First steam fire-engine completed and used in New York, 


President Tyler vetoed a bill for a United States Bank, 
Aug. 16. 

A second bill for a United States Bank vetoed, Sept. 9. 

The india-rubber ball patented by Edwin Chaffee, of Cam- 

Congress passed a general bankruptcy law. 

Samuel Slocum, of New York, invented a machine to stick 
pins in paper. 

The manufacture of the metal stencil was begun in Boston 
by John Pope. 

First electrotypes appeared in " Mapes' Magazine." 

Frederick E. Sickles invented the drop cut-off valve gear for 

The first mercantile agency established. 

Making of Connellsville coke commenced. 

Canning of Maine salmon begun. 

The city of Philadelphia acquired its own gas plant. 




Dorr's Rebellion in Rhode Island, May i8. 

Fremont's first western expedition, June lo. 

Croton water was let into the Fifth Avenue aqueduct, July 4. 

Professor Morse laid first submarine telegraph wire between 
New York and Governor's Island, Oct. 18. 

President proclaimed treaty settlement with England of 
the Northwestern Boundary question, Nov. 10. 

The first attempt at a machine for sewing was made by J. 
J. Greenough, but proved impracticable. 

Reuben Partridge patented the match-splint machine. 

John Ryle built the first silk piece loom at Paterson, N. J. 

Walwortli & Nason introduced the Perkins hot-water heater. 

Thomas Kingsford discovered and perfected a process for 
making starch for commercial uses from corn. 

American ice first exported to London. 

First factory for pocket-knives estabhshed in Connecticut. 


Ericsson built the Princeton, the first screw war vessel 
in the world. 

Napoleon E. Guerin introduced hatching of eggs by arti- 
ficial heat. 

The manufacture of manilla grass paper was begun in Bos- 
ton by Lyman Hollingsworth. 

Improvement in pills patented by Benjamin Brandreth. 

Patent issued to Enos Wilder for the first fire-proof safe. 

Congress voted an appropriation of $30,000 to Professor 
Morse for an experimental telegraph line between Washington 
and Baltimore. 


Prof. Morse sent a telegraphic message from Baltimore 
to Washington, May 27. 

Treaty with China opened several ports there to trade and 
residence, July 3. 

United States recognized the independence of the Sand- 
wich Islands, July 6. 

U. A. Boyden built the first turbine water wheel for a 
Lowell cotton mill, August. 

Williams & Ketcham patented the first mowing-machine, 
Nov. 18. 

Copper mining was commenced in the Lake Superior region. 

Patent granted to Charles Goodyear for the vulcanization 
of rubber. 

First wall-paper printing-machine imported from England. 

Leverett Candee made first boots and shoes from vulcanized 

Power-loom for ingrain carpets invented by Erastus B. 

A. D. Puffer, of Boston, secured a patent for the first soda- 
water cooler. 


President Tyler authorized the annexation of Texas, Mar. i. 

Florida admitted to the Union, March 3. 

James K. Polk inaugurated, March 4. 

Telegraph line between Baltimore and Washington opened 
for the public business, April I. 

Fire did $10,000,000 damage in Pittsburg, Apr. 10. 

Naval Academy founded at Annapolis, Oct. 10. 

Texas admitted to the Union, Dec, 29. 

Anti-rent riots in New York State. 

Borings in Tarentum, Pa., struck petroleum. 

E. B. Bigelow invented the carpet-loom. 

The manufacture of files was commenced at Matteawan, 
N. Y., by John Rothery. 

Eastwick & Harrison invented the equalizing beams con- 
necting locomotive driving-wheels. 

First shipment of apples from Boston to Glasgow. 

Sebastian Chauveau, of Philadelphia, introduced the use of 
machinery in making confectionery. 

First slate quarry in Vermont opened by Colonel Allen and 
Caleb Ranney at Scotch Hill. 

Lowest price on record for cotton. 


Magnetic Telegraph Company organized Jan. 14, and line 
completed between New York and Philadelphia, Jan. 18. 

War declared against Mexico, May il. 

California declared independence from Mexico, July 5. 

New Mexico annexed by the United States, Aug. 22. 

Elias Howe, Jr., patented the first sewing-machine, Sept. 10. 

The anesthetic property of ether discovered by Dr. Wil- 
liam T. G. Morton, of Boston, Sept. 30. 

Iowa admitted to the Union. 

Mormons selected site of Salt Lake City. 

Japan refused to open commercial relations with this country. 

The "ten-wheel " locomotive introduced. 

Oliver R. Chase, of Boston, built first machine for making 

Eastern Hotel, in Boston, the first public building to be 
heated by steam. 

First iron furnace using raw bituminous coal erected at 
Lowell, Mahoning County, O. 


Commodore Shubrick proclaimed the annexation of Cali- 
fornia by the United States, Feb. 8. 

G. Page patented the revolving-disk harrow, August 7. 

The City of Mexico fell to General Scott, Sept. 14. 

Zinc was discovered in paying quantities in Lehigh 
County, Pa. 

Pig iron decarbonized by an air-current into steel by Wil- 
liam Kelly, of Kentucky. 

Richard M. Hoe patented the type-revolving press. 

Farmer constructed an electro-magnetic locomotive which 
drew a car containing two persons. 

Use of adhesive postage stamps first authorized. 

Auction sales of plants and flowers begun in New York. 


John M. Marshall discovered gold in California, Jan. 18. 

Treaty of peace with Mexico signed at Guadaloupe Hi- 
dalgo, Feb. 2. 

Astor Library founded, May. 

Wisconsin admitted to the Union, May 29. 

First meeting of the American Association for the Ad- 
vancement of Science held at Philadelphia, Sept. 20. 

Cochituate water introduced into Boston, Oct. 25. 

Machine for punching and pointing wooden pegs patented 
by Henry P. Westcott. 

Suspension bridge completed across the Ohio river at 

Rogers Locomotive Works shipped locomotives to Cuba. 

First cast-iron-front building in the world erected in New 

Erastus B. Bigelow invented the power-loom for weaving 
Brussels and tapestry carpets. 


First diploma to woman physician granted at Geneva, N. Y., 
to Elizabeth Blackwell, January. 

First bank established in San Francisco, Jan. 9. 


Zachary Taylor inaugurated, March 5. 

Great inundation at New Orleans, March. 

Astor Place Opera House riots, May 10. 

Asiatic cholera epidemic in New Orleans, New York, St. 
Louis, Philadelphia, Nashville, Buffalo, Chicago, and Boston, 

Connecticut river successfully dammed for utilization of 
water-power, Oct. 22. 

Overland rush for California commenced. 

The improved steam-engine valve patented by George H. 

Department of the Interior organized with Thomas Ewing 
as first Secretary. 

New York Associated Press founded. 

Henry Evans of Newark introduced the pendulum press 

for can tops. 


The first meeting of influential men was held at Phila- 
delphia to consider the question of a transcontinental railroad, 
Apr. I. 

First number of Harper's Magazine was published, June. 

Clayton-Bulwer Treaty promulgated, July 4. 

President Taylor died, July 9. 

Vice-president Millard Fillmore succeeded to the chair, 
July 10. 

The manufacture of watches by machinery was commenced 
in Boston by Dennison, Howard, and Davis, July. 

Fugitive Slave Bill passed, Aug. 23. 

California admitted to the Union, Sept. 9. 

The Seventh Census gave the population of the country as 

S. S. Putnam, of Neponset, Mass., began the manufacture 
of nails for horse shoes by machinery. 

Collins Line, the first American line of steamships to Liver- 
pool, established under government subsidy. 

Export of coal first attained commercial importance. 

First ice machine patented. 

Thomas Kingsford discovered the food properties of corn- 

Machinery first came into use in the boot and shoe shops. 

The manufacture of reed organs commenced. 

Page, of Washington, constructed an electro-magnetic loco- 
motive of sixteen horse-power. 


Minot's Ledge Light carried away, Apr. 16. 

Fire did $3,000,000 damage at San Francisco, May 3. 

Southern Rights Convention held at Charleston, May 8. 

New York and Lake Erie Railroad completed from Pier- 
mont to Dunkirk, May 14. 

A second fire destroyed $3,000,000 more property in San 
Francisco, June 22. 

Nicaragua route between New York and San Francisco 
opened, Aug. 12. 

Hudson River Railroad completed from New York to Al- 
bany, Oct. 8. 

Louis Kossuth arrived on his visit to this country, Dec. 5. 

Principal room of the Library of Congress destroyed by 
fire, Dec. 14. 

The canal from Evansville, Ind., to Lake Erie completed. 

Postal rate established at three cents per half ounce for dis- 
tance less than 3000 miles. 

Nelson Goodyear patented process for making hard rubber. 

A. C. Gallahue, Elmer Townsend and B. F. Sturtevant 
patented a pegging machine which cut and drove. 

Western Union Telegraph Company established. 

Electric locomotive taking its power from a stationary bat- 
tery constructed by Thomas Hall, of Boston. 

Cyrus H. McCormick wins a great victory with his reaping- 
machine at the World's Fair in London. 


Fisheries dispute with England, May 26. 

Fire did $5,000,000 damage at Sacramento, Nov. 2. 

Commodore Perry started for Japan on his special mis- 
sion to open up commerce there, Nov. 24. 

United States refused to join England and France in a per- 
petual renunciation of annexation designs on Cuba, Dec. I. 

The electric telegraph fire-alarm introduced in Boston. 

American Pharmaceutical Association organized. 

First paints ready mixed for use, made. 

Maker's stamp on boiler-plate first demanded by law. 

Tilton, Pepper & Scudder start the first plate-glass works 
in Brooklyn. 

First pottery in Trenton built by Speeler, Taylor & Bloor. 

Lamp chimneys first manufactured by Christopher Dor- 
flinger in Brooklyn. 


Ericsson's caloric ship made its trial trip, Jan. II. 

Franklin Pierce inaugurated, March 4. 

Capt. Ringgold's South Sea expedition sailed, May. 

World's Fair opened at the Crystal Palace, in New York, 
July 14. 

Commodore Perry presented to Japan the President's desire 
to establish commercial relations, July 14. 

Purchase of Central Park authorized, July 23. 

New York Clearing House established, Oct. II. 

The first paper collar was seen in New York. 

Lumber-rafting inaugurated by Schulenberg & Borckler. 

United States Pottery Company of Bennington made first 
inlaid-flooring tiles. 

Steam fire-engines put into permanent service in Cincinnati. 

Yellow fever epidemic at New Orleans caused 7848 deaths. 


Cyrus Field, Peter Cooper, and others organized the New 
York, Newfoundland and London Telegraph Company, Mar. i. 

The Homestead Bill passed by Congress to encourage set- 
tlement on the public lands, March 3. 

Treaty with Japan signed, March 31. 

Kansas Nebraska bill passed. May. 

Reciprocity Treaty concluded with England concerning the 
Newfoundland fisheries, June 7. 

Otis Tufts patented an elevator for hotels, Aug. 9. 

The steamship Arctic lost at sea and 350 people perished, 
Sept. 27. 

The Pennsylvania Rock Oil Company, the first petroleum 
company, incorporated in New York, Dec. 30. 

Registry system established by the post-office. 

The first merchant flouring-mill started in Minneapolis. 

Mellier process for straw-paper brought out by A. C. Mel- 

G. D. Dows introduced in Boston the first marble soda 


The first bridge across the Mississippi river completed at 
Minneapolis, Minn., January. 

Tlie railroad between Panama and Colon completed, Jan. 28. 

Suspension bridge at Niagara completed, March. 

Cotton-seed oil first successfully made by Paul Aldige at 
New Orleans. 



Hugh Burgess patented chemical wood pulp. 
Year of the country's greatest maritime construction. 
Vacuum pan introduced in the sugar refineries. 
Yellow fever ravaged Norfolk and Portsmouth, Va. 


First telegraph cable laid across the Hudson at New York, 
Feb. 12. 

The first railroad in California was completed, Feb. 22. 

Central Park purchased for $5,398,695, February. 

The first street-railroad in New England began running be- 
between Boston and Cambridge, March 26. 

George Esterly patented a corn cultivator, April 22. 

New York, Newfoundland, and London Electric Telegraph 
Company organized, May 6, and cable laid to Newfoundland. 

Statue of George Washington was unveiled in Union Square, 


Gail Borden patented condensed milk, Nov. 4, and its man- 
ufacture commenced at Litchfield, Conn. 

Bessemer steel first made at Phillipsburg, N. J. 

Cyrus W. Field established telegraphic communication with 

Sorghum was introduced. 

The first vessel made the passage from Milwaukee to Eu- 
rope via the Welland Canal, Great Lakes, and St. Lawrence 

First refined spelter made at Bethlehem, Pa. 

Borax discovered in California. 

Use of the adhesive postage-stamp made compulsory. 


James Buchanan inaugurated, March 4. 

Dred Scott decision, March 6. 

First great strike and railroad riots commenced on the Balti- 
more and Ohio, Apr. 27. 

Pennsylvania Railroad bought for $7,500,000 the railway 
and canal system built by the State, June 25. 

Police riots began in New York, July 3. 

Ohio Life and Trust Company suspended, and a financial 
panic followed, Aug. 24. 

First and unsuccessful attempt to lay a transatlantic tele- 
graph cable, August. 

Specie payment suspended, Oct. 15. 

Resumption of specie payment, Dec. 4. 

General Rodman began his experiments to discover pressures 
in the bores of guns at the moment of firing. 

The Steamship Central America, having on board $7,800,- 
000 of treasure from California, foundered off the Cuban coast. 

The manufacture of straw-paper begun by J. B. Palser at 
Fort Edward. 

Japan teas appeared in the market. 


Minnesota admitted to the Union, May 11. 
First transatlantic cable successfully laid, Aug. 4. 
First message sent over the transatlantic cable, Aug. 16. 
Peter Cooper presented Cooper Union to the public. 
Gold was discovered at Pike's Peak, Colorado. 
Wells, Fargo & Co. established the Overland Mail Co. 
First cut loaf sugar made in this country. 
Creasing-machine for harness-making patented by W. K. 
Thornton, of Michigan. 

E. S. Drake sank the first petroleum well at Titusville, Pa. 


Oregon admitted to the Union, Feb. 14. 
Treaty with China, Aug. 16. 

John Brown's Raid on Harper's Ferry, Oct. 16. 
Ddbut of Adelina Patti in opera in New York, Nov. 24. 
The improved grand piano patented by Steinway, Dec. 20. 
Photolithography for maps in colors was introduced. 
First shipment of flour from Minneapolis to the East. 
Farmer invented the self-exciting dynamo to take the place 
of the galvanic battery. 


1 1 7 operatives killed and 312 injured by collapse of the Pem- 
berton Cotton Mills in Lawrence, Mass., Jan. 10. 

The chain of railroads was completed from Bangor, Me., to 
New Orleans, January. 

The Japanese ambassadors to ratify Perry's Treaty arrived 
at San Francisco, March 27. 

The Great Eastern arrived at New York, June 28. 

Colonel WiUiam Walker, the famous filibuster in Central 
America, was shot at Truxillo, Sept. 12. 

The Prince of Wales arrived at Washington and visited the 
President, Oct. 3. 

South Carolina seceded from the Union, Dec. 20. 

Central Park was opened to the public. 

The Eighth Census gave the population of the country as 

The " oil fever " broke out in the Alleghany River valley. 

American merchant marine at the point of its greatest pros- 

First importations of Sisal hemp. 

Salt first attained commercial importance in Michigan. 

The transcontinental telegraph sanctioned by Congress. 

First wrought-iron I-beams rolled by Peter Cooper at Tren- 

Alexander Smith and Halcyon Skinner of Yonkers secured 
a patent for power-loom to weave Axminster and Moquette 

Centrifugal machine introduced in the sugar refineries. 


First shot of the Rebellion was fired in Charleston harbor 
against Star of the West, Jan. 9. 

Mississippi seceded, Jan. 9. 

Florida seceded, Jan. 10. 

Alabama seceded, Jan. 11. 

Georgia seceded, Jan. 19. 

Louisiana seceded, Jan. 26. 

Kansas admitted to the Union, Jan. 29. 

North Carolina seceded, Jan. 30. 

Texas seceded, Feb. i. 

First flowing oil-well struck in Pennsylvania, Feb. I. 

Provisional Confederate Government organized at Mont- 
gomery, Ala., Feb. 9. 

Jefferson Davis inaugurated president of the Confederacy, 
Feb. 19. 

Abraham Lincoln inaugurated. Mar. 4. 

Fort Sumter fell, Apr. 14. 

Virginia seceded, Apr. 17. 

Stephen A. Douglas died, June 3. 

First balloon reconnaissances, June 23. 

Battle of Bull Run, July 21. 

Telegraphic communication opened between St. Louis and 
San Francisco, Oct. 25. 

Capt. Wilkes boarded British steamship Trent and seized 
Mason and Slidell, Nov. 8. 

First message sent over the transcontinental telegraph line, 
Nov. 15. 

Banks suspended cash payments, Dec. 30. 



Stereotyping for newspapers introduced by the " New- York 
Tribune " and " New- York Herald." 
The McKay sewing-machine patented. 


Mason and Shdell released and sail for Europe, Jan. i. 

First legal tender act passed, Feb. 25. 

Battle between the Monitor and the Merrimac, March 9. 

The National Guard created by New York, April. 

Farragut captured New Orleans, Apr. 24. 

Revenue tax imposed on spirits, July I. 

Union Pacific Railroad chartered, July i. 

Postage stamps used for fractional currency, July. 

Announcement of the Emancipation Proclamation, Sept. 22. 

Dr. R. J. Catling completed the first Catling gun at In- 
dianapolis, Ind., Nov. 4. 

Lockhart & Company export first shipment of American oil. 

Chicago became the recognized center of the packing in- 

Confederate cruiser Alabama captured and burned ten mer- 
chantmen in two weeks. 

Brewers' Association organized. 


3,120,000 slaves freed by the Emancipation Proclamation, 
Jan. I. 

The National Academy of Science created by Congress, 
March 3. 

West Virginia admitted to the Union, June 19. 

Certificate of authority of the Comptroller of the Currency 
issued to the first of the present national banks, June 20, 

Battle of Gettysburg, July 1-3. 

Draft Riots in New York, July I3-17. 

Habeas corpus suspended, Sept. 15. 

Distance limit for letter postage in the United States re- 

First harness-thread factory established at Paterson, N. J., 
by Barbour Brothers. 

Henry Disston built first crucible-steel melting plant for 
saw steel. 

The channeling-machine invented by George J. Wardwell, 
of Rutland, Vt. 

The so-called musical telephone brought out by Reis. 


Funding of the greenbacks in the six per cents, stopped, 
Jan. 21. 

Sanitary Fair opened at Philadelphia, June 7. 

Battle between the Kearsarge and Alabama, June 19. 

Gold dollar was worth $2.85, July 11. 

Nevada admitted to the Union, Oct. 31. 

From Dec. 1861 to October 1869, the advance in the price 
of cotton goods had been 1000 per cent. 

Columbia College School of Mines organized, Nov. 15. 

General Sherman left Atlanta for the Sea, Nov. 16. 

Northern Pacific Railroad chartered. 

Postal money-order system established. 

George M. Pullman built the " Pioneer," his first car. 


Union troops entered Richmond, Apr. 2. 

Lee surrendered, Apr. 9. 

President Lincoln assassinated, Apr. 14. 

Andrew Johnson succeeded to the presidency, Apr. 15. 

Johnston surrendered, April 26. 

Jefferson Davis captured. May li. 
First rail laid on the line of the Union Pacific, July. 
Capt. Wirz, jailer of Andersonville Prison, hanged, Aug. 21. 
All restrictions removed from Southern ports, Sept. I. 
Martial law ended in Kentucky, Oct. 12. 
Habeas corpus restored in the Northern States, Dec. i. 
National Wool Growers' Association organized, December. 
The Bullock perfecting press brought out. 
Polished plate glass first made at Lenox, Mass. 
New York Stock Exchange moved into its present building. 
Broad and Wall streets. 


France acceded to request of United States to withdraw 
troops from Mexico, Jan. 9. 

President Johnson publicly denounced the Reconstruction 
Committee, Feb. 22. 

The President proclaimed the Rebellion at an end, Apr. 2. 

Civil Rights Bill passed over President's veto, Apr. 9. 

Jefferson Davis indicted for complicity in the assassination 
of Lincoln, May 8. 

Fenian invasion of Canada, June I. 

Commercial convention concluded with Japan, June 25. 

Fire did $10,000,000 damage at Portland, Me., July 4. 

Tennessee restored to the Union by Congress, July 23. 

The second Atlantic cable successfully laid, Aug. 16. 

Convention of workingmen at Baltimore made first demand 
for an eight-hour working day, Aug. 21. 

The lost Atlantic cable of 1865 brought up, spliced, and laid, 

Congress established the elective franchise without respect 
to race or color in the District of Columbia, Dec. 14. 

Daniel G. Chase, of Chicago, patented a machine for mak- 
ing conversation lozenges. 

National Board of Fire Underwriters organized. 

Salmon canning on the Columbia river begun. 

Steinway & Son perfected and introduced the upright piano. 

Tallemont & Carrol patented the velocipede with two 



French troops evacuated the City of Mexico, Feb. 5. 

Nebraska admitted to the Union, March i. 

Military Reconstruction Bill passed, March 2. 

National Bankruptcy Bill, March 2. 

Jefferson Davis released on $100,000 bail. May 13. 

The President removed Secretary of War Stanton, Aug. 12. 

First steel rails rolled by Cambria Iron Company of Johns- 
town, Pa., August. 

The President proclaimed general amnesty to all who took 
part in the Rebellion, Sept. 7. 

Alaska purchased from Russia for $7,200,000, Oct. 9. 

Convention of the manufacturers of the country at Cleve- 
land, O., demanded the full payment of the national debt, 
Dec. 18. 

Pullman Palace Car Company organized. 

First consignment of California green fruit received in New 

Ground wood pulp first put into printing paper. 

Hard-rubber-covered harness trimmings patented by An- 
drew Albright, of Newark. 

American Institute of Architects founded. 

Master Car Builders' Association organized. 


The non-concurrence in removal of the Senate returned 
Secretary Stanton to the War Department, Jan. 13. 
Fire did $3,000,000 damage in Chicago, Jan. 28. 


House resolved that President Johnson be impeached, 
Feb. 22. 

Race riots between Irish and German immigrants on Ward's 
Island, March 5. 

Impeachment trial of President Johnson begun, March 7. 

Memorial Statue of Abraham Lincoln unveiled at Washing- 
ton, Apr. 15. 

Secretary Stanton finally retired and succeeded by Gen. 
John M. Schofield, Apr. 26. 

North Carolina, South Carolina, Louisiana, Georgia, Ala- 
bama, and Florida again admitted to representation in the 
Union, June 12. 

Arkansas readmitted to the Union, June 20. 

New treaty with China, July 4. 

A majority of the States adopted the Fourteenth Amend- 
ment to the Constitution, July 20. 

Congress passed bill providing for the payment of the na- 
tional debt, July 25. 

Gen. Grant abolished by proclamation the military districts 
as authorized by the Reconstruction Act, July 28. 

President Johnson acquitted on impeachment proceedings. 

First Westinghouse air-brake used on the Pittsburg, Cin- 
cinnati and St. Louis. 

Improved typewriting machine patented by C. Latham 

First Siemens-Martin open-hearth furnace built at the New 
Jersey Steel and Iron Company's works at Trenton. 


Great Niagara Suspension Bridge opened, Jan. i. 

Improvements to East River channel began at Hell Gate, 
Jan. II. 

Ulysses S. Grant inaugurated, March 4. 

First transcontinental railroad completed by the junction 
of the Union and Central Pacific, May 15. 

United States end of first Franco-American cable landed 
at Duxbury, Mass., July 23. 

Ground broken in the construction of the New York Post- 
Office by Col. Joseph Dodd, Aug. 9. 

Black Friday in Wall Street, Sept. 24. 

Treaty negotiated for the annexation of San Domingo, but 
rejected by Senate, Nov. 29. 

Cable screw-wire machine for boot and shoe manufacture 

System of traveling theatrical companies introduced. 


Hiram R. Revels of Mississippi, the first colored man elected 
to the United States Senate, Feb. 25. 

President proclaimed Fifteenth Amendment ratified by the 
States, March 30. 

Attorney General Hoar and Secretary of the Interior Cox 
resigned, June 20. 

Kansas Pacific Railroad opened to Denver, Aug. 15. 

President proclaimed neutrality in Franco- Prussian trou- 
bles, Aug. 22. 

General Robert E. Lee died, aged sixty- three, Oct. 12. 

The Ninth Census gave the population of the country as 

Mississippi, Texas, and Virginia restored to the Union. 

Terra-cotta first generally used for building purposes. 

Soleil's polariscope introduced into this country. 

Single or continuous process for making wall-paper intro- 

Bigelow attacher and heeling machine introduced in shoe 

Granger movement began in Illinois. 
Rhode Island passed first of the drug laws. 
Chicago-Omaha railroad pool. 

Advertisements in magazines first largely published by 
Scribner's Monthly. 


Income-tax law repealed, Jan. 26. 

To relieve the destitution in France caused by the Franco- 
Prussian War, A. T. Stewart, the New York merchant, sent a 
$50,000 cargo of flour to Havre, Feb. 25. 

Congress passed the bill for a centennial celebration in 1876, 
March 3. 

The first Civil Service Commission was authorized, March 3. 

Charles Sumner was removed from the chairmanship of the 
Senate Committee on Foreign Relations, March 9. 

United States and England agreed to submit Alabama claims 
to arbitration. May 8. 

Ship canal across the Isthmus of Darien reported feasible 
by Commander Selfridge, United States Navy, July. 

Anti-Tweed mass meeting in New York upon the dis- 
covery of his gigantic frauds, Sept. 24. 

The great Chicago fire destroyed $200,000,000 worth of 
property in that city, and 250 lives were lost, Oct. 8. 

The Post-Office extended its money-order system, making 
it international, October. 

R. Hoe & Company complete the perfecting press. 

Texas Pacific Railroad incorporated. 


Yellowstone National Park created by Congress, Feb. 27. 

Amnesty Bill passed by Congress completed the political 
reorganization of the country, and filled every seat in the na- 
tional legislative body. May 22. 

Geneva Tribunal met, and $15,500,000 awarded the United 
States on the Alabama claims, June 15. 

Import duties on tea and coffee abolished, July I. 

Great fire in Boston ; damage $75,000,000, Nov. 9. 

The Bonanza mines on the Comstock Lode discovered. 

First iron oil-tank cars used. 

Water-gas process patented by Lowe. 

Cable grip patented by Andrew S. Halliday. 

Hoffman Brothers made first practical application of the 
band saw. 

National Stove Manufacturers' Association organized. 

Carriage Builders' National Association organized. 


Political riots in New Orleans, March I. 

The annual salary of the President of the United States fixed 
at $50,000, March 4. 

Chicago celebrated the rebuilding in nineteen months of the 
entire section laid waste by the great fire, June. 

Congress abolished the franking privilege, July i. 

Jay Cooke & Co., the New York bankers, failed, and a fi- 
nancial panic ensued, Sept. 18. 

Acquittal of Mayor A. Oakey Hall of New York on charges 
of corruption, Dec. 24. 

Westinghouse automatic air-brake introduced. 

First Lowe apparatus for water-gas erected at Philadelphia. 

Apparatus for hot soda water patented. 

First East and West trunk line agreement made at the Sa- 
ratoga Conference. 


Mill River dam in Massachusetts burst, destroying four vil- 
lages and causing the loss of over 200 lives, May 16. 


The great steel bridge across the Mississippi at St. Louis 
completed by James B. Eads, July 4. 

Fire did $4,000,000 damage at Chicago, July 14. 

Shore end of a new Atlantic cable landed at Rye Beach, N. Y., 

July IS- 

The Lincoln monument at Springfield, 111., dedicated, and 
the remains of the martyred President placed in the crypt 
prepared, Oct. 15. 

Bradford oil field discovered, Dec. 6. 

King David Kalakaua of the Hawaiian Islands arrived in 
Washington on a visit to the United States, Dec. 12. 

James Lick, of San Francisco, deeded millions to a board 
of trustees to be used in benevolent undertakings. 

Massachusetts passed a ten-hour law. 

First trunk pipe-line from oil regions to Pittsburgh. 

Barbed-wire manufacture began at De Kalb, 111. 

First fast mail on the New York Central Railroad. 

Bloody political riots in New Orleans, Jan. 4. 

Senator Sherman's bill for the resumption of specie pay- 
ment passed to take effect Jan. I, 1879, Jan. 14. 

Hoosac Tunnel completed, Feb. 9. 

Oshkosh burned, Apr. 28. 

Bank of California in San Francisco suspended, Aug. 26. 

Vice-president Henry Wilson died and was succeeded by 
Thomas N. Ferry, President pro tern, of the Senate, Nov. 22. 

William M. Tweed escaped from his Ludlow Street jailers, 
Dec. 4. 

Secretary Benjamin H. Bristow exposed the whisky frauds. 

First use of natural gas as a fuel in glass-making by Roches- 
ter Tumbler Works. 

The Palace Hotel opened in San Francisco. 

First typewriting machine offered for sale. 

Great forgeries by E. D. Winslow, of Boston, discovered, 
Jan. 24. 

Gen. O. E. Babcock, private secretary to the President, 
acquitted of complicity in the whisky frauds, Feb. 7. 

Secretary of War Belknap resigned, under charges, March 2 ; 
was impeached and arrested, March 8, and acquitted, Aug. i. 

Bell secured his first patent for the telephone, March 7. 

A. T. Stewart died, aged seventy-three, Apr. 10. 

Dom Pedro, Emperor of Brazil, arrived in New York on a 
visit to the United States, Apr. 15. 

President Grant opened the Centennial World's Fair in 
Philadelphia, May 10. 

Peter Cooper was nominated for the presidency by the Na- 
tional Greenback party. May 18. 

James Bailey, the first of the A. T. Stewart cousins, com- 
menced a contest over the will, June. 

Secretary of the Treasury Bristow resigned, June 17. 

The Custer Massacre, June 25. 

Colorado admitted to the Union, Aug. I. 

William M. Tweed re-arrested at Vigo, Spain, and returned 
to New York, Sept. 6. 

Hallett's Point Ledge removed by dynamite, Sept. 24. 
The first cremation furnace completed at Washington, Pa.^ 
Oct. I. 

President declared South Carolina in a state of insurrec- 
tion, and Federal troops were stationed at the polls, Oct. 17. 

The famous Ilayes-Tilden presidential election, Nov. 7- 

The Brooklyn Theater fire, 300 Hves lost, Dec. 5. 

Exportation of dressed beef begun. 

Power-loom for hard-drawn wire cloth invented by Wick- 
wire, of Cortlandt, N. Y. 


Commodore Cornelius Vanderbilt died, aged eighty-two, 
leaving an estate of $100,000,000, Jan. 4. 

The Special Commission announced Hayes elected presi- 
dent by the Electoral College with 185 votes ; Samuel J. Til- 
den, the Democratic candidate, received 184, March 2. 

Rutherford B. Hayes inaugurated, March 5. 

Alexander Graham Bell successfully tested the telephone 
between Boston and Salem, Mass., March 15. 

United States troops withdrawn from New Orleans, Apr. 24. 

The great Railroad Strike commenced in and about Pitts- 
burgh, July I. 

Moons of Mars discovered by Asaph Hall, Aug. 11. 

Canal at Keokuk on the Mississippi completed, Aug. 22. 

Brigham Young died, aged seventy-six, Aug. 29. 

Bell's improved telephone put into general use. 

Goodyear welt machine brought out. 

Col. A. A. Pope has the first bicycle built in this country. 


Gold quoted at loi J^ on Wall street, being lower than it had 
been since 1862, Jan. 23. 

Bland Silver Bill passed over President's veto, February. 

William M. Tweed died in Ludlow Street Jail, Apr. 12. 

The first train ran on the Gilbert Elevated Road on Sixth 
Avenue, Apr. 29. 

Chin Lan Pin, the first regularly accredited resident ambas- 
sador from the Chinese Empire arrived in San Francisco, 
July 25. 

The first train on the New York Elevated Road on the 
East side, Aug. 15. 

The repeal of the National Bankruptcy Act became effec- 
tive, Sept. I. 

Subdivision of the electric current accomplished by Edison, 
and incandescent lights introduced, October. 

The Manhattan Savings Institution in New York burglar- 
ized to the extent of nearly $3,000,000, Oct. 27. 

A. T. Stewart's body stolen, Nov. 8. 

Yellow fever epidemic in the South. Memphis almost de- 

Wall Street quoted gold at par, Dec. 17. 

Knickerbocker Ice Company inaugurated long-distance 
shipments of ice by rail. 

Blake transmitter for telephones brought out. 


The Government resumed specie payments, Jan. i. 

A National Board of Health established, March 3. 

The United States Geological Survey created, March 3. 

Beef-canning on a large scale introduced by the packing 


Ferdinand de Lesseps entertained by the American Society 
of Civil Engineers at New York, Feb. 26. 

The Metropolitan Museum of Art opened in New York, 
March 30. 

The P'irst National Meet of American bicyclists was held 
at Newport, R. I., May 31. 

The Egyptian obelisk arrived in New York, July 19. 

Dr. Henry S. Tanner of Minneapohs ended a forty days' 
fast, Aug. 7. 

The Tenth Census gave the population of the country as 

Germany prohibited the importation of American pork. 

Knickerbocker Ice Co. imported first Norwegian ice. 


Edison built the first electric road at Menlo Park. 
California State Board of Viticulture created. 
Dongola kid put on the market. 


Representatives from nineteen governments met at an In- 
ternational Sanitary Conference in Washington, Jan. 5. 
James A. Garfield inaugurated, March 4. 
Star Route frauds discovered, March. 
The Jeannette Arctic Expedition lost in the ice, June II. 
President Garfield assassinated by Charles J. Guiteau, July 2. 
President Garfield died, Sept. 19. 

Chester A. Arthur succeeded to the presidency, Sept. 20. 
Cases against Star Route principals dismissed, Nov. 10. 
France prohibited the importation of American pork. 
Monroe doctrine emphasized by Secretary Blaine. 


Congress increased the number of representatives in the 
House to 325, by a new apportionment based on the census of 
1880, February. 

Fire did $2,250,000 damage at Haverhill, Mass, Feb. 17. 

James G. Blaine's famous eulogy on Garfield delivered in the 
House of Representatives, Feb. 27. 

Congress passed the first Chinese Restriction bill. May 6. 

Guiteau hanged, June 30. 

Bill passed to extend the charters of the national banks, 
July 12. 

National Wholesale Druggists' Association organized. 

Mississippi floods rendered 85,000 people destitute. 


The National Civil Service created, Jan. 16. 

Revised Tariff adopted, March 3. 

Taxes on capital and deposits of the national banks abol- 
ished, March 30. 

Peter Cooper died, aged ninety-two, Apr. 4. 

S. G. W. Benjamin appointed first minister resident to Per- 
sia, May. 

Treaty concluded with Corea, May 15. 

The Brooklyn Bridge opened. May 24. 

Gen. Brady and ex-Senator Kellogg, of Louisiana, finally 
acquitted on charges connected with the Star Route frauds, 
June 14. 

Last spike driven in the Northern Pacific Railroad, Sept. 8. 

Letter postage reduced to two cents, Oct. i. 

Centenary of British evacuation of New York celebrated. 

First canneries for Alaska salmon established. 

Machine for stuffing horse-collars patented by William 
Foglesong, of Dayton, O. 


Commercial Convention with Spain signed, Feb. 13. 
Treaty with Mexico ratified, March I. 
Mob riots in Cincinnati, March 28-30. 
Marine Bank and Grant and Ward failures. May. 
Corner stone of pedestal for Statue ®f Liberty laid, Aug. 5 
Treaty of Reciprocity with San Domingo signed, Dec. 4. 
The New Orleans Exposition opened, Dec. 16. 
National Confectioners' Association of the United States 

Telephone wires first put under ground. 


Washington Monument dedicated, Feb. 22. 
Grover Cleveland inaugurated, March 4. 

President James D, Fish of the Marine Bank sentenced to 
ten years at Sing Sing, June 27. 

Gen. Grant died, aged 63, July 23. 

Anti-Chinese riots in the West, Sept. 2. 

Flood Rock in the East River blown up by dynamite, Oct. 10. 

Ferdinand Ward sentenced to ten years at Sing Sing, Nov. i. 

Fire did $2,500,000 damage at Galveston, Texas, Nov. 13. 

Vice-president Thomas A. Hendricks died at Indianapolis, 
aged sixty-six, Nov. 25. 

Ohio oil field discovered at Lima. 

Long-distance telephone introduced to use. 


Senator Hoar's Presidential Succession Bill passed, Jan. 19. 

Commission appointed to investigate Jacob Sharp and the 
New York " Boodle Aldermen," Jan. 26. 

General strike on the New York street-railroads, March 4. 

Boycott by Knights of Labor begun on the Gould railroad 
system in the West, March 6. 

Anarchist riots and bomb throwing in Chicago, May. 

The great Charleston earthquake, Aug. 31. 

The Statue of Liberty dedicated, Oct. 28. 

Steamship Oregon was sunk off the Long Island coast. 

Wire nails first manufactured. 

First oil-tank steamers built. 

Experiments made with electrical locomotives by Frank J. 
Sprague on the elevated road in New York. 


Senator Edmund's Retaliatory Bill in the Canadian Fisher- 
ies dispute passed, Jan. 19. 

The courts twice declared boycotting illegal, February. 

The Trade Dollar Bill passed, Feb. 19. 

Strike of the Massachusetts shoe factory operatives, February. 

Inter-State Commerce Commission created, April 3. 

Building trades' strike in Chicago, and stove molders' strike 
in St. Louis, April. 

Lehigh Valley coal miners went out, Aug. 30. 

First vestibule Pullman train in service. 

Experiment stations established by the government. 

Beet sugar first successfully produced at Alvarado, California. 


Bell telephone patents confirmed by the United States Su- 
preme Court, March. 

Fisheries treaty negotiated with England but rejected by 
the Senate, August. 

The first electric street-railway was built by Frank J. 
Sprague at Richmond. 


Strike on New York street railroads, Jan. 28. 

Department of Agriculture created, with Norman J. Cole- 
man secretary, Feb. 11. 

Benjamin Harrison inaugurated. Mar. 4. 

U. S. men-of-war Vandalia, Nipsic, and Trenton wrecked 
at Apia, Samoa, Mar. 16. 

Centennial of President Washington's inauguration cele- 
brated at New York, Apr. 29. 

Johnstown, Pa., inundated by bursting of a reservoir. May 
31, 3000 lives lost. 

Seattle, Wash., swept by a fire which destroyed $5,000,000 
worth of property, June 6. 

New York naval militia created, June 14. 

North Dakota admitted to the Union, Nov. i. 

South Dakota admitted to the Union, Nov. 2. 


Montana admitted to the Union, Nov. 8. 
Washington admitted to the Union, Nov. il. 
Fire did $4,000,000 damage at Lynn, Mass., Nov. 26. 
Jefferson Davis died at New Orleans, Dec. 6. 
Tanks for the making of window glass introduced by J. 
Chambers at Jeannette, Fa. 


The United States recognized the Republic of Brazil, Jan. 29. 

The Lenox Hill and Sixth National Bank, of New York, 
suspended, Jan. 30. 

The Centennial of the United States Supreme Court cele- 
brated, Feb. 4. 

President Harrison signed the World's Fair Bill, Apr. 25. 

Idaho admitted to the Union, July 3. 

Wyoming admitted to the Union, July 11. 

William Kemmler, the first murderer killed by electricity, 
was executed at Auburn Prison, N. Y., Aug. 6. 

Great strike on the New York Central Railroad, Aug. 8. 

President Harrison signed the McKinley Tariff Bill, Oct. I. 

Several heavy failures occurred in Wall Street, Nov. 10. 

The Eleventh Census gave the population of the country as 

National Wholesale Saddlery Association of the United 
States organized. 


Proclamation of Reciprocity Agreement with Brazil, Feb. 5. 

International Copyright bill passed, March 4. 

Italy recalled Baron Fava owing to troubles over the New 
Orleans race riots, March 31. 

The centennial of the patent system was celebrated in 
Washington by a Congress of Inventors, Apr. 8. 

Treaty of Reciprocity with Spain, Apr. 20. 

The first railroad passenger train ran to the summit of 
Pike's Peak, June 30. 

Commencement of rain-making experiments in Texas, 
Aug. 10. 

First armor-plate supplied to the government by the Beth- 
lehem Iron Company and Carnegie, Phipps & Company, 


Chilian outrages on American seamen, Jan. 18. 

Constitutionality of the McKinley Tariff affirmed by the 
United States Supreme Court, Feb. 29. 

The Standard Oil Trust dissolved by consent of the share- 
holders, March 21. 

$3,000,000 cotton fire in New Orleans, Apr. 3, 

Platinum discovered in South Dakota, Apr. 30. 

Homestead Steel Works closed, June 30. 

Attempted landing of a Pinkerton force precipitated the 
bloody Homestead riots, July 6. 

Work resumed at Homestead, Aug. 3. 

Railroad strike at Buffalo called out the militia, Aug. 13. 

The Atlantic liner Moravia arrived in New York with cholera 
on board, Aug. 31. 

Fire did $7,000,000 damage at Milwaukee, Wis., Oct. 28. 

Discoveries of gold in Colorado, Dec. 21. 

Long-distance telephone line between New York and Chi- 
cago formally opened. 

A Vauclain compound-locomotive attained a speed of 97 
miles an hour, being one mile in 37 seconds. 


News received of the Hawaiian revolution, Jan. 28. 
Annexation of Hawaii recommended by President Harri- 
son, Feb. 15. 

The President raised the Stars and Stripes on the New 
York of the new American line, Feb. 22. 

Grover Cleveland inaugurated, March 4. 

President Cleveland withdrew the Hawaiian treaty from 
the Senate, March 9. 

Fire did $4,500,000 damage in Boston, March 10. 

The World's Fair opened at Chicago by President Cleve- 
land, May I. 

Locomotive No. 999, of the New York Central, covered one 
mile in 32 seconds. May 10. 

Chinese Exclusion Act confirmed. May 14. 

Wide-spread distrust breaks out in a terrible financial panic, 
June 20. 

$8,000,000 Clearing House Certificates issued to give relief, 
June 30. 

Congress met in special session, Aug. 7. 

The panic had passed, but confidence was not restored, 

Mayor Carter H. Harrison, of Chicago, assassinated, Oct. 28. 

World's Fair closed, Oct. 30. 

The Silver Repeal Bill passed, Nov. i. 

The last outstanding Clearing House Loan Certificate 
retired, Nov. i. 


World's Fair Buildings burned with a loss of $2,000,000, 
Jan. 8. 

Decision of Court of Appeals allowed foreign corporations 
to buy and sell New York real estate, Jan. 16. 

$50,000,000 of 5 per cent, bonds issued, February ; second 
issue of $50,000,000, November. 

Coxey's Commonweal Army arrived in Washington, Apr. 29. 

Boycott on the Pullman Works began the great Chicago 
railroad strike, June 25. 

The Hawaiian Republic proclaimed, July 4. 

Chicago railroad strike ended, July 13. 

Fire did $3,000,000 damage in Chicago, Aug. I. 

The United States recognized the Hawaiian Republic, 
Aug. 9. 

The Wilson Tariff Bill passed, Aug. 27. 

Launch and christening by Mrs. Grover Cleveland of steam- 
ship St. Louis, largest vessel built in America, November 12. 


The Bond Syndicate took an issue of $62,317,500 of gov- 
ernment " coin " bonds, February. 

The Empire State Express on the New York Central cov- 
ered a distance of 436}^ miles in 4075^ minutes, Sept. II. 

The New York, New Haven and Hartford Railroad equipped 
its Nantasket Beach branch to operate by electricity. 

Steamship St. Paul, the second great American liner, 

The Baldwin Locomotive Works consummated a working 
agreement with the Westinghouse Electric and Manufacturing 
Company for the production of electric equipment for railway 

Great activity in the iron and steel industries. 

Message by President Cleveland to Congress on Venezuela, 
emphasizing the Monroe Doctrine. 

" Commercial Day," December 19, observed in New York, 
and by commercial organizations generally throughout the 
country. The American Commerce Banquet at Delmonico's, 
New York. 

The New York " Shipping and Commercial List and New 
York Price Current " attains its hundredth year. 



BANKS and banking, taken of themselves, con- 
stitute a chapter of first importance in Amer- 
ican records. To the national life the bank- 
ing system is as the arterial system to the animal life. 
Through it circulates the vitalizing current which 
sustains the brain of business and statecraft, and 
strengthens the arm of labor. It facilitates all com- 
mercial transactions, and utilizes all the resources of 
trade, gathering together the surplus capital of the 
country, each depositor affording comparatively 
little, but collectively producing a sum immense in 
quantity, which can be loaned in portions to those 
who may need it. No part of the uninvested capital 
then remains unused ; what is not required by one 
can be used by another. 

In this country the existence of banks dates from 
the time of the Revolutionary War. Since then 
the methods pursued to attain the ends proper to the 
banking function have been frequently and often 
radically changed. They have always been, however, 
more or less sound, considered with regard to their 
adaptation to the times they served and the needs 
they had to supply. In the history of their varia- 
tions, therefore, we must see the effect of changed 
conditions, rather than assume the downfall of early 
error. One century ago the fiscal affairs of America 
rested in the hands of a great national bank, the Bank 
of the United States. The institution was modeled 
almost exactly upon the plan of the Bank of England, 
then, as now, one of the greatest financial factors in 
the world. For forty years, with a brief lapse of be- 
tween four and five years, just before and during the 
War of 1812, this institution continued to be the 
dominant power in the financial affairs of America. 
Its passing away was marked by one of the bitterest 
political fights known to history, waged by that 
doughty old partisan, Andrew Jackson, and his suc- 
cessor, Martin Van Buren. The next quarter of a 
century saw the so-called State-bank system in full 

control. Many of these State banks were, undoubt- 
edly, as sound and solvent as any of the great insti- 
tutions to-day. Others, it is equally true to say, were 
not. The condition of affairs which resulted from 
their operation, as a whole, however, can scarcely 
be said to have been of the best. With no uniform 
basis for their government, the prosperity of the time 
had constantly to struggle under the disadvantage of 
a demoraHzed currency, discounted in direct propor- 
tion to the number of miles it traveled from home. 

The Civil War, with its terrible demands upon the 
country, found this system unable to respond as fully 
as was needed, and a new system, the one under 
which we have remained until to-day, was devised. 
It avoids the centralization of power in any one great 
chartered institution, and distributes it at large among 
the banks of the country. It places the pledge of our 
government behind every bank-note issued in the 
United States. Around this national system has 
grown up the financial world of to-day. Among 
these facilities are banks of discount and deposit, 
which furnish their conveniences to the mercantile 
world; great private houses, with branches reaching 
to every other country, and furnishing a medium of 
foreign exchange which renders possible the extended 
commercial enterprises which now characterize Amer- 
ica; and savings institutions, trust companies, and 
financial engines without number, all furnishing the 
power to drive the great business machines of to-day. 

The beginning of American banking is so indis- 
solubly linked with the name and fame of Alexander 
Hamilton, first Secretary of the Treasury of the United 
States, that many have forgotten the fact that Robert 
Morris, the Philadelphia merchant, was the first great 
American banker. He it was who, in company with 
George Clymer and a few other gentlemen, taking as 
their sole security bills drawn in desperation by the 
Continental Congress on John Jay, then in Spain ne- 
gotiating a loan, established on their own personal 


credit in 1780 the Pennsylvania Bank, in Carpenters' 
Hall, Philadelphia. This was the first bank es- 
tablished in the United States. Its only object was 
to aid, with all its resources, the government in 
transporting and maintaining the army, then in the 
most desperate need. This patriotic end it accom- 
plished, and to its aid, given at a most critical time 
in the national history, it is scarcely possible to as- 
cribe too great an importance, 

Robert Morris having been appointed Superin- 
tendent of Finance, the Bank of Pennsylvania went 
out of existence in the following year, and Congress, 
acting by Mr. Morris's advice, granted in December 
to him and his associates a charter for the Bank of 
N orth America, and in J anuary , i78i,thenew bank be- 
gan business in Philadelphia. Thomas Willing was its 
first president, and there were twelve directors. While 
this bank was, like its predecessor, designed to give 
aid to the government, then in those desperate finan- 
cial straits which marked the closing years of the 
war, it was also intended to furnish its facilities to in- 
dividuals and to carry on a general banking business. 
Its capital was $400,000, and it was conducted on a 
specie basis, its notes being declared legal tender. It 
also secured a charter from the State of Pennsylva- 
nia, and as it was the only bank in the country at that 
time, it soon began to roll up large profits. The years 
1783 and 1 784 saw this prosperous institution declar- 
ing dividends of 14 per cent. Such success imme- 
diately produced emulators, and a coiporation was 
formed to start a rival bank. Before its charter had 
been secured, however, its leading projectors were 
pacified by being allowed to obtain large blocks of 
a new issue of $500,000 worth of stock. This pre- 
served its field undivided, and its prosperity contin- 
ued. In 1 787 it was rechartered by the Pennsylvania 
legislature as a State bank, and with renewals from 
time to time, has since continued. 

New York, having seen the success of the Bank of 
Pennsylvania, and her merchants, appreciating the 
facilities afforded by such an institution, began agitat- 
ing the question of the establishmentof a bank in their 
city. A number of prominent men assembled, and a 
plan was proposed which was at once called by its 
opponents the " land " bank. It provided for pa}ang 
in but a small proportion of the capital in specie, the 
balance to be secured by land accepted at two thirds 
of its appraised value, and against which notes, pay- 
able in specie, could be issued for one third of its 
value. Of this plan Chancellor Livingston was the 
great supporter, and his influence had nearly carried 
it through the legislature when it applied to be 
chartered. Its adversaries, prominent among whom 

was Alexander Hamilton, managed to defeat its 
passage, however, and it was never revived. Much 
more serious was the experience of a modified form 
of "land" bank which convulsed the colony of 
Massachusetts a number of years before, and was 
finally established after the deposition of an opposing 
governor. In a short time, however, the British 
government dissolved it, and placed some severe re- 
strictions upon banks in that particular colony. 

The demand for a bank continued to be made 
by the New York merchants, and on February 23, 
1784, a call was issued for a meeting which was 
held at the Merchants' Coffee House and General 
Alexander MacDougal occupied the chair. It was 
then decided to start a bank with a capital of 
$500,000, either gold or silver, divided into 1000 
shares. On March 15th, 500 shares having been 
taken, the stockholders organized by the election of 
General MacDougal as president, and Samuel Frank- 
lin, Robert Bowne, Comfort Sands, Alexander Ham- 
ilton, Joshua Waddington, Thomas Randall, William 
Maxwell, Nicholas Low, Daniel McCormick, Isaac 
Roosevelt, John Vanderbilt, and Thomas B. Stough- 
ton, as directors. William Seton was elected cash- 
ier, and so unused were New York business men of 
that day to banks and banking methods that Cash- 
ier Seton was immediately sent to Philadelphia, 
with letters of introduction to the Bank of North 
America, to learn how such affairs were properly 
conducted. The stockholders, in the interim, urged 
on by the hopes of large profits, hastened all their 
arrangements, and as a charter had not been se- 
cured from the legislature, the bank started without 
one, opening its doors June 9, 1784. 

This bank, known as the Bank of New York, had 
for its original location the old mansion of William 
Walton, at No. 67 St. George's (now Franklin) 
Square. Three stories high, and built of the old 
yellow Holland brick with hewn stone lintels, this 
ancient house, erected in 1752, remained standing 
until 1 88 1. 

But even at this early day, it appears, there were 
many people who believed that banks were antago- 
nistic to the interests of the community, and in 1785 
and 1786, currency becoming scarce, a cry went up 
that these institutions were hoarding specie, and in 
some States, notably New York, where the feeling was 
greatest, issues of paper money were put out by the 
legislatures. Financial affairs were in this condition, 
general confidence being shaken, when, the Con- 
stitution having been adopted and General George 
Washington elected to the presidency, Alexander 
Hamilton, the first Secretary of the Treasury, came 


forward with his famous financial policy. The na- 
tion assumed and bonded the debt incurred by the 
Continental Congress and the various colonies in 
carrying on the war, and, going further, established 
in 1 791 the Bank of the United States. This bank, 
which was chartered by Congress for twenty years, 
was estabhshed to act as the fiscal agent of the 
government and to be the depository for the public 
moneys. It was also authorized to issue its notes, 
payable in specie, and was made in every way possi- 
ble the agent of the United States Treasury and the 
great power in the financial affairs of the country. 
Its capital was placed at $10,000,000, divided into 
25,000 shares of $400 each, payable one fourth in 
specie and three fourths in 6 per cent, stocks of the 
United States. It was allowed to hold property of 
all kinds up to the value of $15,000,000, inclusive 
of its capital stock, and further to establish branch 
banks in the various cities. In accordance with 
this last provision it at once opened in New York a 
branch known as an office of discount and deposit. 
The prosperity of the Bank of the United States be- 
gan at once, and during its whole career it averaged 
annual dividends of 8 and 10 per cent. 

The influence of Hamilton's policy was immedi- 
ately felt, and prosperity speedily returned. The 
spirit of speculation was let loose in the land and 
a stringency resulted in the currency that seemed 
likely to have serious consequences, and was only 
averted by Alexander Hamilton and the United 
States Treasury coming three times to the relief of 
the straitened business community. After this little 
set-back, which was of short duration, business con- 
tinued steadily to improve. In New York, where 
political influence had prevented the granting of 
charters for new banks, a corporation known as the 
Manhattan Company, and headed by Aaron Burr, 
succeeded in 1799 in getting a charter, ostensibly to 
provide New York with pure water. The capital 
of the company was placed at $2,000,000, and, un- 
noticed by the politicians in power, the charter con- 
tained a clause which, after reciting that the capital 
was to be devoted to establishing a water-supply, 
declared that the surplus should be " employed in 
the purchase of public or other stocks or any other 
moneyed transactions or operations not inconsistent 
with the laws and constitution of the State of New 
York." It is needless to say that with such a clause 
in its charter $500,000 was quickly found, and the 
money, after fulfilling the object for which the char- 
ter was granted, was devoted to the establishment of 
a new bank. In 1803 no less than forty banks were 
open and doing business throughout the country. 

The expiration in 181 1 of the charter of the Bank 
of the United States, which had failed of renewal, 
followed by the war declared in 181 2 against Eng- 
land, placed the country in a most unsatisfactory 
position. Having httle or no credit, it found itself 
forced to fall back in great measure on the banks. 
These were all institutions under State charters, no 
less than 123 new ones having been created in the 
four years following the closing of the United States 
Bank. These had an aggregate capital of $40,000,- 
000 and emitted notes to the face value of $200,- 
000,000, a large portion of which, in the Middle 
States especially, were issued as loans to the gov- 

As might, perhaps, have been expected in view of 
the prostration of the public credit, the strain upon 
the banks speedily became too great, and Septem- 
ber I, 18 14, specie payment was suspended. It 
was during this period that the private banker first 
assumed the importance in the commercial world 
that he has to-day. Stephen Girard, the great 
Philadelphia merchant, purchased in 181 1 the build- 
ing and stock of the late Bank of the United States, 
and then began carrying on a banking business him- 
self, with a capital of $1,200,000, which he shortiy 
increased to $4,000,000. While private bankers 
had, of course, existed, there had been none in 
America on such a grand scale, and it marks the 
beginning of the era of great houses whose names 
are associated with money the world over. Girard's 
patriotism was, too, quite equal to his sagacity, and 
in the closing years of the war, after the Treasury had 
vainly tried to float a loan of $5,000,000, but had 
only been able to secure a total subscription of $20,- 
000, Girard took the whole amount. The assist- 
ance thus furnished undoubtedly had its effect in 
bringing about the successful peace. This was ac- 
complished in December, 1814, and one of the acts 
of Congress soon after was to grant a new charter 
for twenty years to the Bank of the United States. 
This institution accordingly resumed business in 
January, 181 7, and speedily became one of the 
greatest financial institutions in the world. Its capi- 
tal was fixed at $35,000,000, divided into 350,000 
shares. Of this, $7,000,000 was held by the United 
States. Of the remainder a great amount, as much as 
84,000 shares at one time, was held in foreign coun- 
tries, and the stock was quoted at 50 per cent, above 
par. This bank issued notes, none being less than 
five dollars, payable in specie on demand, and did 
a general banking business, discounting notes and 
making advances on bullion at the rate of 6 per 


Its government was entrusted to twenty-five di- 
rectors, five of whom, being holders of stock, were 
appointed by the President of the United States. 
From these directors was chosen a board of seven 
which, headed by the president, had active control 
of all its operations. It rapidly established branch 
offices in all the cities of any importance, and in 
1830 there were twenty-seven of these branch banks 
in existence and doing a thriving business. 

One of the first effects of the rechartering of the 
Bank of the United States was to force the large num- 
ber of State banks either to resume specie payments 
or to wind up their affairs. Many were forced to the 
latter alternative, and of the 446 State banks then ex- 
isting, there were 165, including those ruined by the 
war, which went out of business. From the aggre- 
gate State banking capital of $90,000,000, in the 
whole country, these suspensions withdrew $30,000,- 
000. Of this amount, $5,000,000 was an actual 
loss and was distributed between the government 
and individual holders. For some time after this 
the State banks can scarcely be said to have in- 
creased, although they continued in existence and 
legislative provision for them and their government 
was made in many of the States. 

In New York a general banking law, known as 
the Safety Fund Act, was passed in April, 1829. 
Under it banks were allowed to issue circulating 
notes up to twice the amount of their capital, and 
their loans were limited to two and a half times their 
capital. A guarantee fund was created by the an- 
nual payment of one half of one per cent, on the 
capital stock to the State Treasurer. This payment 
was only to continue until three per cent, had been 
paid, and the fund thus created was to go to mak- 
ing good the payment of the circulation and other 
debts of any such banks as might become insolvent. 
Other States had different regulations, not all of 
them as wise as New York, perhaps, but each one 
establishing certain precautions. 

Coincident almost with the rechartering of the 
United States Bank was the introduction of banks 
for savings. These institutions are a branch of bank- 
ing that, while deserving an extended mention, must 
fall, under the lines of this article, within a brief 
space. Benevolent in conception and designed to 
afford the poor an opportunity to save in small 
amounts, their plan is simply one of deposit, on 
which the bank, as borrower, pays to the depositors 
a fair rate of interest, and with the advantage of a 
large capital, the aggregate of many small deposits, 
makes advantageous investments unattainable to 
small capitals such as the individual depositor could 

control. They differ from regular banks because 
of their philanthropic purposes, in being exempt 
from taxation, and in not loaning or investing their 
funds on personal security. 

The first American savings bank was opened in 
Philadelphia in 1816 and was called the Philadel- 
phia Savings Fund Society. The same year one 
was estabhshed in Boston, New York following in 
1 8 19, and in 1820 there were ten in the country, 
having 8635 depositors and $1,138,570 in deposits. 
They have increased with the country, and in 1890 
there were 921 with 4,258,893 depositors, and hav- 
ing placed to their credit the enormous sum of 

For many years the Bank of the United States 
continued to grow more and more powerful. Its 
resources increased, its business extended, and it be- 
came a factor in the industrial and commercial life 
of the nation, such as had not been dreamed possi- 
ble. On the first of November, 1832, it was accord- 
ing to its own showing one of the richest institutions 
in the world. Its total liabilities, including the 
notes it had in circulation, its deposits, and the debts 
owing to holders of public funds, were $37,296,- 
950.20; while its assets, including specie, cash in 
Europe, and debts from industrial and banking 
companies, were $79,593,870.97. This left the 
enormous surplus of $42,296,920.77. It seemed as 
stable as any institution of its kind in the world, not 
excepting the famous Bank of England, and it 
afforded a currency for general circulation that was 
freely accepted everywhere. But the great power 
of the Bank of the United States had made it ene- 
mies, and a demand arose, upon General Jackson's 
election to the presidency, that it should not be re- 
chartered. The officers were chiefly of the party 
opposed to him. Immediately upon entering ofllice 
the President announced that he would refuse to 
sign any bill extending the life of the Bank of the 
United States. He declared that it was dangerous 
to the liberties of the United States, and that it was 
unconstitutional. Shortly after this, the public funds 
were withdrawn from the bank. So great had been 
the prosperity of the country during the twenty 
years this bank had operated, however, that the war 
debt of the nation had been completely paid and a 
surplus of $40,000,000 remained. This surplus, 
upon its withdrawal from the Bank of the United 
States, Congress voted to distribute among the States. 
The blow dealt to the great bank by this withdrawal 
was a terrible one, and with the loss of its charter 
impending and the unrelenting enmity of the Admin- 
istration, it was thought it must close. Nicholas 

Levi P. Morton. 


Biddle, its president, determined not to give up, 
however, and on February i8, 1836, he stole a march 
on President Jackson by having it incorporated by 
the State legislature as the Pennsylvania Bank of 
the United States. In this form, as a State bank, it 
continued to exist, but it never assumed the impor- 
tance it had had before. It finally closed in 1840. 

All this, however, took years to work itself out, 
and in the meantime much was happening in the 
financial world. The demise of the Bank of the 
United States as a national institution left the field to 
the banks chartered by the States. These at once 
made the most of their opportunity ; and helped, as 
they were, by receiving on deposit large sums of the 
distributed public moneys, they increased rapidly, 
and 1837 saw 634 of them in the country, having an 
aggregate capital of $291,000,000. With the great 
prosperity which, in the shape of State bank-notes, 
came over the country with these financial changes, 
arose also a spirit of the wildest speculation. Public 
lands were the chosen field of the operators, and the 
dealing ran into millions. It was all based, though, 
on the current notes, many of these being issued by 
" wildcat " banks, and worthless. Trouble seemed 
certain, and President Jackson, in trying to establish 
our finances on a sound basis, issued his famous Spe- 
cie Circular, ordering all agents to accept nothing but 
specie in payment for the public lands. This pre- 
cipitated the crash. The banks were called upon at 
once to redeem all their circulation in specie, and 
after vainly attempting to do so, they suspended pay- 
ment on May 9, 1837. Six months later, no relief 
having come, a meeting of 136 delegates from banks 
all over the country was held in New York to con- 
sider whether means could be devised for resumption, 
but no relief at that time was found possible. 

It was during this unlucky year that, at President 
Van Buren's suggestion, the sub-treasury plan as it 
now exists was brought forward as a measure to pre- 
vent the loss of the public moneys by the failure of 
banks. It was defeated at this time, but three years 
later passed, only to be repealed in the succeeding 
year. Five years afterward, however, it was finally 

In May, 1838, the New York banks resumed pay- 
ment. They were followed in August by the Phila- 
delphia and Southern banks, but these only held out 
for a little over a year, and on September 9, 1839, 
suspended again. Despite all the trouble in which 
the banks were involved, they increased almost as 
rapidly as before. In 1840 their number had swelled 
to 901, with a total capital of $358,000,000. The 
system of State banks, nevertheless, had grown un- 

popular, and the suspensions of 1837 and 1839 and 
the continuing uncertainty and lack of confidence 
caused a strong demand for a return to the old na- 
tional banking system. At this time the presidential 
campaign in which General Harrison was elected 
came on. One of the great issues on which this cam- 
paign was fought and won was that a new national 
bank should be estabhshed at once, and immediately 
upon his inauguration General Harrison called a spe- 
cial session of Congress to consider the matter. But he 
was destined never to carry out the wishes of his party, 
for he died before Congress had convened, and his 
successor. President Tyler, twice vetoed the measure 
when it was passed and presented to him, — as a bill 
to estabHsh a " Financial Agent of the Government" 
"to act for it in all fiscal matters, and to facilitate 
mercantile exchanges throughout the country." This 
action on the part of the President settled the ques- 
tion of banks acting under the authority of the United 
States for many years thereafter, and until 1864 all 
banks of issue and deposit were operated under char- 
ters obtained in their various States. The effects of 
the lack of uniformity in the system were soon visible, 
not only in the stringency from 1840 to 1843, ^.nd the 
later suspension of 1857, but in the generally demor- 
alized currency, which, with the exception of specie, 
had its standard of par only in its own neighborhood, 
and could be passed at any considerable distance 
only at a great discount. The farther away it went 
from the bank of issue the less it was worth. The 
State banks continued to put forth as many notes as 
they could pass. Many of these banks were perfectly 
solvent institutions, and were wisely conducted upon 
a sound basis; but truth compels the statement that 
many others were not, while at the root of the whole 
system was the lack of an essential uniformity. Bank 
failures were very common. It is worthy of mention 
here that throughout all the vexations and inconve- 
niences caused by the State banks in their day, New 
England was little affected. What was known as the 
Suffolk Bank System was there in use; by this the 
Suffolk Bank of Boston redeemed and collected for 
all New England banks, each of which had a stipu- 
lated deposit, the whole aggregating $300,000, with 
the Suffolk Bank for this purpose. 

The stringency of 1840-43 having been safely 
tided over by the banks, better times appeared, and 
a still further impetus was given to our national pros- 
perity in 1849 by the discovery of gold in California, 
developing great activity both industrially and com- 
mercially. In the next four or five years the one 
event which stands out conspicuously in American 
banking was the establishment on October 11, 1853, 



of the New York Clearing House Association. This 
association, of the utmost importance in expediting 
and giving security to the great banking interests of 
the country, began with a membership of fifty-two 
banks. Its system, so simple and yet so effective 
that it seems almost impossible its origination and es- 
tablishment could have been so long delayed, is that 
by which each bank, instead of presenting separately 
to the other banks for payment such of their checks 
as it holds and in its turn paying cash to all the other 
banks for such of its own checks as they hold, sends 
them all at a certain hour to the Clearing House. 
Here all the checks are assorted, a clerk being pres- 
ent from each bank having a membership; and the sum 
total of the checks each bank presents, compared with 
the sum total of the checks presented against it, gives 
a balance for which the Clearing House draws its 
check, and transactions that would have taken many 
clerks and messengers a whole day to complete, 
are finished in an hour or a little more. In addition 
to the convenience of this system, its beneficial effect 
in economizing currency is immense. When it is re- 
membered that the great banking interests which 
center in New York have transactions daily involv- 
ing exchanges of from $100,000,000 to $200,000,000, 
it will be readily understood what a vast loss such an 
amount of idle money would entail under the old 
system of separate clearance payments. The Clear- 
ing House, with its system of balances, is able to 
settle it all by the use of from 3^ to 4 per cent, of 
the total currency amount involved. 

In addition to these advantages, the Clearing 
House is an assurance of protection for its mem- 
bers, and in its more extended operations of issuing 
loan certificates at critical times has been a bulwark 
of safety to the banking interests of the whole coun- 
try. By its help, at the outbreak of the Civil War, 
the New York banks were enabled to come instantly 
to the assistance of the government with large 
sums, which they could scarcely have commanded 
otherwise; and later, in the panics of 1873 and 1893, 
the issuance of $25,000,000 in loan certificates on 
the first occasion, and nearly $50,000,000 on the 
second, again did much toward enabling the banks 
to withstand the terrible pressure of those times. 
Between these years the average daily exchanges 
of the Clearing House were $105,964,277 and the 
average daily balances $3,939,265. At present 
sixty-six banks are members of the Clearing House 
Association. Besides these, eighty-one other banks 
and trust companies which are not members are 
cleared here through the banks which belong to the 
association. A sixty-seventh member of the Clear- 

ing House Association is the Assistant Treasurer of 
the United States, at the sub-treasury in New York. 
Almost 90 per cent, of the government expendi- 
tures being made in New York by check, the mem- 
bership of the Assistant Treasurer greatly facilitates 

The advantages of the clearing-house system were 
immediately recognized when the New York asso- 
ciation started, and Boston, Philadelphia, Chicago, 
St. Louis, and other cities soon adopted it. 

Returning to 1853, the banking interests of the 
country continued much in the same condition, but 
trouble was already brewing from over-speculation, 
and in 1857 the great financial and industrial de- 
pression, which was fortunately as short as it was 
sharp, struck the country. The great storm broke 
on August 24th of that year, when the Ohio Life and 
Trust Company suspended with liabilities of $7,- 
000,000. It was a terrible failure, and on September 
25th and 26th the Philadelphia banks were forced 
to suspend; a general suspension in Virginia, Mary- 
land, Rhode Island, and the District of Columbia 
soon following. The trouble increased in New 
York, and a run on the banks threatening serious 
consequences, the legislature on October 14th au- 
thorized a suspension of specie payments for one 
year. The banks accordingly closed, but on Decem- 
ber 24th, after only two months, the city banks re- 
sumed. The Massachusetts banks also suspended, 
and the panic became general in New England, 
factories being shut down, banks closed, and troops 
held in readiness to suppress anticipated riots among 
the great crowds who were thrown out of work. For- 
tunately the trouble did not last long, but while it 
existed there were 5123 failures, with total liabilities 
of $291,750,000. 

The resumption of banks and renewal of business 
was general early in the succeeding year, and that 
the banks of the country suffered as little as any of 
the great interests affected is shown by the fact that 
in i860, one year prior to the long suspension of 
specie payments caused by the war, there were in 
the country' 1562 banks, with an aggregate capital 
of $422,000,000 and a circulation of about $207,- 
000,000. They held in specie at the time $83,594,- 
537, and were credited with deposits of $254,000,000. 

During the next four years the part played by the 
banks was loyal and patriotic, but the history of 
that time with its government issues of " legal ten- 
ders" comes more properly within the domain of 
national finance. The national banking law, which 
regulates the banks to-day, was passed June 3, 1864. 
Its provisions are simple and eminently secure, and 


in their operation have proved most satisfactory. 
They require a company of five persons or more 
and a fully paid-up capital. As a security for their 
notes of issue they are obliged to hold the govern- 
ment's pledge in the form of United States bonds, 
on which they are allowed circulation by the Comp- 
troller of the Currency up to 90 per cent, of their 
par value. Shortly after this law was passed, Con- 
gress placed a prohibitive tax of 10 per cent, on the 
circulating notes of the State banks, so that for the 
first time since 1836 the currency of the country re- 
turned to the original basis of the national credit, 
where it has since remained, 

The national banking law had no sooner passed 
than many of the old State banks began changing 
to the new system. While the war lasted the num- 
ber of the national banks was about 500. Those 
that remained under the old State charters contin- 
ued to do, as they are doing to-day, a general bank- 
ing business of discount, loan, and deposit, but the 
circulation of their notes became impossible owing 
to the tax. When the national banks were first or- 
ganized Congress had provided that the total cir- 
culation to be allotted them by the Comptroller of 
the Currency should not exceed $300,000,000. So 
rapid was their increase, however, that four years 
later the full amount of these notes had been issued, 
and there were 1629 national banks with a paid-in 
capital of $426,189,111. Of these banks Massa- 
chusetts had 207 ; New York, 299 ; Pennsylvania, 
197; and Ohio, 133. Two years later, inconven- 
ience being experienced because the limit of circu- 
lation had been reached, Congress authorized an 
extra issue of $54,000,000, which was almost imme- 
diately taken up. 

The following year (1873) saw the disastrous ordeal 
of panic and distress through which it was inevitable 
the nation should pass on its return from the infla- 
tion caused by the great war loans to the sound and 
normal basis of peaceful prosperity. It was passed 
without wreck, although commercial and financial 
interests suffered heavily. In 1875 Congress re- 
moved all restrictions upon the total amount of 
notes the national banks might issue. It also voted 
the resumption of specie payment, which had been 
suspended since 1861, and decreed that it should 
take place January i, 1879. This resumption, it 
may be said, to the undying credit of the American 
nation, was accompHshed without the slightest dis- 
turbance of business. Since then, the number of na- 
' tional banks in the country has increased steadily 
each year. With 2047 banks, having an aggregate 
capital of $497,864,833 and a total surplus of $134,- 

123,649 in 1875, the next ten years showed, in 1885, 
the existence of 2665, with capital amounting to 
$524,599,602 and a surplus of $146,903,495, mak- 
ing an increase of 618 banks and a gain of $26,734,- 
769 capital and $12,779,846 surplus. Still growing 
and prosperous, the country continued to call for the 
further extension of the banks with their facilities and 
assistance, and in 1892 their number had become 
3701, having an aggregate capital of $679,076,650 
and a surplus of $237,761,865. These banks in 
their average daily deposits took over $300,000,000, 
which shows the enormous part they play in the 
business world. Of this, about 90 per cent, is in the 
form of the almost universal check. 

In this year (1892) came upon the country the 
beginning of the depression of business and financial 
stringency that is now so happily showing signs of 
abatement. It came more gradually than such 
crises usually come and has been more persistent. 
Without actual panic the country verged perilously 
near to disaster. The money-broker, who had almost 
disappeared since the days of the war, reappeared 
and secured premium for currency of any sort. The 
banks had very little money of any kind, and for a 
time payments were almost wholly in certified checks. 
This showed that the trouble was not really organic, 
and vast sums of idle money, hoarded and withdrawn 
from circulation, further attested that the country 
was not impoverished. But confidence was lacking, 
and it operated as a check on enterprise which, re- 
acting industrially as it always does, reached all 
classes and caused much suffering. It also gave 
rise to the great danger of a run being commenced 
on the savings-banks. In the West, indeed, this did 
happen ; and many perfectly solvent institutions were 
forced to the wall, being unable to realize quickly 
enough on their securities to meet demands. In 
New York, when the trouble became threatening, 
and a rush of eager, excited depositors was to be 
expected at almost any moment, the savings-bank 
officials met, and taking advantage of the law, de- 
clined to pay any accounts without three months' 
notice. This saved the banks, but it was the nearest 
approach to suspension that had been known since 


The causes of the trouble have been matter for 
much discussion and difference of opinion during 
the past two years ; and a belief that its roots lay in 
certain fallacies of national finance, has caused action 
by Congress, which has undoubtedly been beneficial 
in its effect. Still, it is questionable whether the true 
seat of the difficulty has been, or will be, reached by 
any of these measures or plans of alleviation. An 



overreaching speculation, which had locked up re- 
sources that should have been available, coupled 
with great uncertainty and some apprehension, per- 
haps owing to political events and the commercial 
and industrial changes they might be expected to 
bring with them, had much to do with it. To-day, 
it is pleasant to believe we have passed beyond it. 

In this brief resume of a century of banking in 
America, the vastness of the present interests has 
been already foreshadowed. How enormous these 
interests are and of how general usefulness, words 
alone can convey no adequate idea. In figures only 
can expression be found for the financial magnitudes 
that make up the American banking interests of to- 
day. From the $400,000 capital represented by 
Robert Morris's bank in Philadelphia a little over 
100 years ago, the aggregate capital of the banks 
of the United States is now, according to the 
latest available statistics, the tremendous sum of 
$1,069,826,555, while one person in every seven or 
eight in the whole country patronizes the banks as 
a depositor and thus gains the privilege of their con- 
veniences and economy. Against the above aggre- 
gate of capital the banks hold aggregate resources 
amounting to $7,342,397,052, and of the 12,000 
banks in existence, exclusive of loan and trust com- 
panies, in the year ending July, 1894, only seventy- 
nine failures occurred. The solvency of the system 
is well evidenced in this, and safeguarded as the 
banks are by Federal and State legislation, with reg- 
ular examinations by experts and sworn reports from 
officials, it is fair to say that no community enjoys 
greater security for its funds of deposit or exchange. 

The very foundation of the American system for the 
past thirty years has been the national bank, which 
has opened its doors in nearly every town and hamlet 
of the country where the common business of life is 
transacted. It is a well- organized, carefully super- 
vised, uniform system, which renders its benefits to 
the individual directly and indirectly, as well as in 
the revenue it affords the government. The latest 
statistics give the number of national banks in the 
country, October 31, 1894, as 3756, in which there 
were 287,842 shareholders. Their aggregate capital 
was $672,671,365, and their total surplus and un- 
divided profits $334,121,082. Of these banks and 
their capital, Pennsylvania led with 406 within her 
borders, but her capitalization was but $74,168,390, 
or less than that of New York with 334 banks and 
$87,346,060 capital, or than Massachusetts with 267 
banks and $97,992,500. In the importance of its 
national banks Ohio ranks fourth, with 246 institu- 
tions having a capital of $45,240,100. 

The total resources of the national banks on 
October 2, 1894, were $3,473,922,055, and on Oc- 
tober 31st of the same year they had a total cir- 
culation of $207,472,603 outstanding, as security for 
which there were United States bonds on deposit to 
the value of $199,706,200, and $28,071,239 lawful 
money reserved on deposit to redeem circulation. 
Their total loans and discounts were $2,007,122,- 
191. In individual deposits the national banks 
held on July 18, 1894, $1,647,017,129, and the 
number of depositors was given as 1,929,340. 

Under the latest statement of the condition of the 
national banks, based on Comptroller Eckels's call 
of July nth last, the figures show the aggregate of 
resources and liabilities to have been $3,410,002,- 
591 each. The whole number of national banks 
was 3715. 

As the national banks do not usually pay interest 
on current balances, the fact that they are utilized as 
banks of deposit to such a great extent shows the 
appreciation in which the facilities afforded by them 
for the transaction of business are held by the public 
at large. Since the national banking system started, 
upward of thirty years ago, the aid rendered through 
it to the business world in carrying on its undertak- 
ings has come to be fully recognized. The ruinous 
rates of exchange prevailing under the old State- 
bank system, prior to the war, are happily forgotten. 
A check or draft can be bought from a bank 
in New Orleans or San Francisco, drawn on its 
New York correspondent, which will cost but the 
smallest fraction of i per cent., or nothing at all, ac- 
cording to the time of year and the direction in 
which money is moving. For this same exchange 
in 1859 the average rate was from i to i^ per 
cent., a tax upon the extension of business that 
could not be borne in the present era of close 
competition and narrow margins. Again, on the 
total issue of about $200,000,000 of State bank- 
notes in circulation prior to i860, a loss of from i per 
cent, to 10 per cent, was entailed upon the holders 
in any but the most restricted local transactions. 
The advantage of replacing this circulation of dis- 
count by a bank-note of uniform appearance, with 
value fixed by law and ordered receivable at par 
by every other bank in the system, was speedily 
apparent. Furthermore, behind this uniformity lies 
as security the quickest asset known, in the shape of 
the United States bond fully covering the circula- 
tion. Lawful money reserves further provide for the 
redemption of circulating notes by these banks, and 
a further reserve of deposit funds is ordered not 
alone to secure depositors, but to still further hedge 



about the reserves from possible impairment. In 
all these ways, as well as by the reductions achieved 
in rates of interest on loans and discounts, through 
making available a largely increased capital, together 
with lessened charges for collection made possible 
by thorough organization, the people have directly 
felt the benefits of improved banking methods. The 
immense aggregate saving that is accomplished an- 
nually along these lines can be gathered from the 
fact that the clearing houses of the United States in 
the single year of 1894 had clearings amounting to 
over $45,000,000,000. With such great sums as 
these, the smallest fractional charge possible becomes 
heavy in the aggregate of transactions. 

Of the relation of the national banks to the gov- 
ernment there is but little dispute, and practically 
but one opinion — that it is mutually beneficial. 
Until March 3, 1883, both capital and deposits of 
the national banks were taxed, and a further tax of 
I per cent, on their circulation has been continued 
from the first. From these three items of taxation, 
the first two discontinued since 1883, an aggregate 
amount of $144,660,952 had been yielded up to 
July 1 8, 1894. In addition to this a conservative 
estimate allows two fifths per cent, of revenue to 
government on the national bank-note circulation, 
through failures to redeem, which forces the banks 
to make the full amount good before taking down 
their deposit of United States bonds against which 
the notes were issued. 

As government depositories the national banks 
further perform without charge duties that annually 
save the government a great deal of money. Since 
their inauguration the national banks have received 
and stored in their vaults, at various times, $3,- 
500,000,000, a service of great value. As a gov- 
ernor of the national currency, operating to keep it 
within controllable bounds, the national banks have 
also been of the greatest assistance through the fa- 
cilities they afford for the issue of instruments of 
credit. The depositors in the national banks in 
1894 outnumbered by 492,702 those in all the 
State and private banks and loan and trust compa- 
nies combined. As these, together with the national 
banks, are utilized for checking against balances on 
deposit rather than on those in banks for savings, it 
is readily seen that the check is more largely em- 
ployed at the national banks than at the other insti- 
tutions, and inasmuch as at least 53 per cent, of 
even the retail, and consequently more largely cash, 
business of the country is transacted through the 
medium of these small pieces of paper, while from 
90 to 92 per cent, of the total business is thus 

transacted, the important part they play will be like- 
wise readily understood. The circulating medium 
which, in a relative sense, these instruments of 
credit supply, is perhaps a relief that should coun- 
terbalance the complaint sometimes made regarding 
the non-elasticity of issue under the present national 
banking system. The average annual circulation 
of the national banks between 1864 and 1894 was 
$282,801,252, and the security of the notes is ab- 
solute. A fluctuating market for bonds, against 
which only a percentage of issue is allowed, has 
undoubtedly made the lines of issue a little rigid, 
but whether more so than is consistent with proper 
precautions against possible manipulation or infla- 
tion is a matter of extreme doubt. In fact, so far 
as the system goes, it is the most perfect yet de- 
vised, and in its operation has united uniformity 
and stability with great facility of adaptation to 
the constantly arising needs of the commercial and 
financial interests. 

On the national banks as a foundation, then, rests 
the great superstructure of State, private, and sav- 
ings-bank institutions, which, together with the 
building and loan associations and the loan and 
trust companies, constitute the remainder of the 
money-managing world of this country. Of the 
State banks there were in the United States 5033 on 
July I, 1894, with an aggregate capital of $244,- 
435,573 and resources amounting to $1,077,164,- 
813. These banks held a surplus of $74,412,319. 
The aggregate deposits were $658,107,494, and the 
loans and discounts $665,988,823. Of United 
States bonds these banks held but $604,055, as 
against $10,662,200 held as investment by the na- 
tional banks in addition to those deposited as secur- 
ity. The business is profitable, but in the average 
rather less so than that of the national banks. In 
all the respects of general banking the State banks 
transact the same kinds of business as the national 
institutions, with the exception of the issuance of 
circulating notes and the performance of those 
functions of a governmental nature entailed by a 
Federal charter. 

The savings-banks in existence in July, 1894, were 
1024 in number and in two classes, the mutual and 
the stock. The latter class, of which there were 
378, is of comparatively slight importance, not more 
than 15 per cent, of the total figures of this branch 
of banking being accredited to it. The capital 
stock of the savings-banks of the country is about 
$30,000,000, and their total resources are $1,980,- 
744,189. The total amount of the deposits of indi- 
vidual savings is $1,747,961,280, while about $30,- 



000,000 more is held subject to check. The loans 
of these banks amount to $1,026,622,425, of which 
but a very small percentage relatively is secured on 
other than real or intrinsic values. 

The private banks, while neither so numerous nor 
so heavily capitalized as the branches just men- 
tioned, are a most potent factor in the commercial 
world, by their especial prominence in the field of 
foreign exchange. Their number in 1894 was 904, 
and their total capital $26,652,167, with resources 
of $105,379,051. Their surplus was placed at $6,- 
005,126. The total of the loans and discounts was 
$66,596,017, being $521,468 in excess of deposits. 

The 224 loan and trust companies have a total 
capitalization of $97,068,092 and a surplus of $57,- 
663,599. Their total resources are $705,186,944, of 
which loans and discounts are $374,421,713. With 
the exception of the national and savings-banks, 
these companies are the heaviest holders of United 
States bonds among the banks, $13,449,411 being 
accredited to them. 

These five branches constitute, properly speaking, 
the American banks. The building and loan as- 
sociations are a species of cooperative banking, sav- 
ings, and loan business, and, since they started in 
1840, have grown rapidly. The statistics of 1894 
gave 5838 of them in operation in the United 
States. These wonderfully fast-spreading institu- 
tions, deriving their capital from dues assessed on 
their members and loaning it again to those giving 
real security, had in 1894 the enormous sum of 
$470,142,524 loaned on real estate alone. As 
nearly all the loans are small in amount, being 
simply enough to build a home for some compara- 
tively poor person, the extent of this cooperative 
undertaking is readily seen. In addition to these 
loans on real estate, the associations have combined 
resources sufficient to bring the total to $528,852,- 
885, against which the heaviest items are $370,003,- 
478 for dues paid in, and $35,775,366 on paid-up 

Under these various heads, then, the banking in- 
terests of America have grouped themselves in the 
closing years of the nineteenth century. Beneath 

them all are the broad, strong shoulders of the United 
States government, bearing the final responsibility. 
In the magnitude of the interests now represented in 
the bank, all branches of industry and commercial 
activity have at last come to see their share. In the 
statistics of the annual report is told each year the 
story of what America has achieved. In the exten- 
sion of the bank to the remoter districts are carried 
the same improvements to the every-day business 
conditions of the community that the waterworks 
brings to the sanitary conditions, or the public school 
to the educational conditions. The bank is the agent 
of civilization in its advance, whether in new coun- 
tries or new fields of human endeavor. In the city it 
is the great driving engine furnishing the power for 
the machinery of affairs. The few brief figures of the 
dry and business-like report, giving the resources of 
the banks of the United States at $7,342,397,052, 
tell most eloquently the commercial and industrial 
achievements of the American people. To this suc- 
cess the banking interests have contributed in no 
scanty measure, and in it they, in common with all 
the people, share to-day. 

One very prominent feature in the history of bank- 
ing has been the part played by private banks. It 
has been seen that Stephen Girard was very import- 
ant in the history of Philadelphia banking; and later. 
Prime, Ward & King, bankers in New York, were 
enabled to perform eminent services for their country 
by loans negotiated in England. It was not, how- 
ever, till about the time that the supply of gold from 
California raised the prices of commodities all over 
the globe, that many important American houses in 
banking circles became prominent. Every great city 
now has its private banks and bankers, who exercise 
an important part in the economy and distribution of 
wealth. They are able to handle business without 
making it known to the whole world; they can af- 
ford instant aid, without appeal to a board of direc- 
tors, and everywhere they have proved of value. 
Such names as those of the Drexels, the Morgans, 
the Peabodys, and the Browns, will instantly occur 
to every one as household words in the realm of 

p ^ -^-^— XV^V>^K^ 



4 CCORDING to the census of 1890, the total 

/ \ number of people engaged in gainful oc- 
A. \. cupations of all kinds was 22,735,661, of 
which number 18,820,950 were males and 3,914,711 
females. These figures include all engaged in any 
gainful occupation, whether wage-earners or wage- 
payers, whether employers or employees, and whether 
engaged in manual or professional service. Elimi- 
nating the wage-earners from this vast number, it 
is found that they constituted 15,099,901, of which 
number 11,802,540 were males and 3,297,361 were 
females. If we classify this large number of wage- 
earners, we find that 3,639,437 were engaged in 
agriculture, fisheries, and mining; 4,153,385 in do- 
mestic and personal service; 2,364,661 in trade and 
transportation, and 4,942,418 in manufacturing and 
mechanical industries. These statements are general, 
and that more specific information may be at hand 
the table on the next page has been made, giving 
the number of males and females and the total 
employed in specific occupations where more than 
50,000 were engaged. 

It would be exceedingly interesting if the growth 
of this great body of working-people, numbering 
over 15,000,000 at the present time, and the in- 
fluences which have brought it into existence, could 
be traced step by step during all the past 100 years. 
It is impossible to give statistical statements of the 
number of persons employed in any industry, or 
otherwise, until the census of 1850, so we cannot 
ascertain what the strength of the body of working- 
people was in 1795. A fair calculation, based on 
relative statistics at different periods, would indicate 
that it was less than 500,000. Calculations in this 
respect are not satisfactory, however, because labor 
at the beginning of the loo-year period of which we 
are treating was engaged in domestic manufactures, 
of which no general account exists. 

Four fifths of the population of the United States 

at the close of the Revolutionary War was, according 
to Mr. Bancroft, the historian, of English descent. 
He states that in 1775 the colonies were inhabited 
by persons one fifth of whom had for their mother 
tongue some other language than the English. At 
the present time careful consideration would indi- 
cate that only about one half of our population can 
claim the English as their mother tongue ; and yet, 
during the first quarter of the present century, im- 
migration could not have afiected the nationality of 
our working-people to any great extent, the accepted 
estimate of the total number of immigrants between 
1790 and 1819 being placed at 250,000. Prior to 
this year (1819) no account was taken of the num- 
ber of immigrants settling in the country, but since 
that year the Federal government has taken account 
of immigration. In no year between 1820 and 1824, 
inclusive, did the number arriving in this country 
reach 10,000. In 1833 the largest number in the 
first third of the present century arrived, when 
58,640 immigrants were registered. In only two 
years, 1835 and 1838, has the number been less 
than that just given, but with these two exceptions, 
the annual immigration has been progressive, al- 
though varying in volume. Great impetus was 
given in the forties, the movement being accelerated 
by the famine in Ireland in 1846 and 1847, and by 
political causes in Germany. The total immigra- 
tion since the Revolutionary War and up to July 
31, 1895, was 17,731,678, while the foreign-bom 
residing in this country at the census of 1890 was 
9,249,547, being 14.77 P^^ cent, of the whole 

These large additions to our population must 
have had a marked influence upon our industrial 
conditions. In 1880 30.63 per cent, of all persons 
engaged in manufacturing and mechanical indus- 
tries were foreign-bom, while in 1890 31.56 per 
cent, of those so engaged were born abroad. In 



1880 12.52 per cent, of the foreign-bom were en- 
gaged in agriculture. It is seen, therefore, that the 
manufacturing and mechanical industries have ab- 
sorbed a much larger proportion of the new ele- 
ment than has agriculture. The tendency of our 
immigrants is to assimilate with our mechanical in- 
dustries. This, of course, increases the supply of 
labor in comparison to the demand, and may have 
at times lowered wages and crippled the consuming 
power of the whole body of the population. I am 
satisfied that this has not been serious, and it may 
have been imperceptible, for at the time of the ac- 
celerated movement of immigration there was a vast 
development of the railroad interests of the country, 
which development could not have been carried on 
so extensively and completely as it was without a 
large body of common laborers. Immigration sup- 
plied this labor, but it soon began to find its way 
into organized industry. As the tendency of wages 
has been constantly upward since the close of the 
last century, it cannot be argued that the assimila- 
tion of immigrants with our own native labor has 
reduced wages, but it can be assumed — without the 

possibility of proof, however — that such assimilation 
may have retarded their increase beyond what was 

During the past few years the industrial depres- 
sion has checked immigration, but with renewed 
prosperity the movement may assume its normal 
proportions. The character of immigration has 
changed, and this change has not been for the bet- 
ter. If immigration could be left entirely to natural 
motives it is quite evident that the movement would 
be retarded gradually, but it is stimulated by trans- 
portation companies, in their desire to secure busi- 
ness, to such an extent that a large body of objec- 
tionable immigrants has been brought to the country 
during the past ten years. When it is known that an 
immigrant can be transported from Italy to Chicago 
for less money than a first-class passenger can travel 
from New York to Chicago it is not strange that 
people flock to the United States; and during this 
past decade it is quite certain that labor in America 
has suffered through this class of immigration, espe- 
cially in mining districts, where wages have been 
kept down and much distress has prevailed through 




Agriculture, Fisheries, and Min- 

Agricultural laborers 

Fishermen and oystermen. . . . 
Lumbermen and raftsmen .... 

Miners (coal) 

Miners (not otherwise noted) . 

Stock-raisers, herders and 


Domestic and Personal Service : 

Barbers and hair-dressers 


Engineers and firemen (not 

Housekeepers and stewards. . 

Laborers (not specified) 

Launderers and laundresses. . 

Nurses and midwives 


Watchmen, policemen, and de- 

Trade and Transportation : 

Agents (claim, commission, 
real estate, insurance, etc.) 
and collectors 

Bookkeepers and accountants. 

Clerks and copyists 

Draymen, hackmen, teamsters, 


Locomotive engineers and fire- 

Messengers and errand and 
office boys 


Salesmen and saleswomen . . . 

Steam-railroad employees (not 
otherwise specified) 























Females. Total, 




































Telegraph and telephone oper 

Manufacturing and Mechan- 
ical Industries: 



Boot and shoe makers and re- 

Brick and tile makers and terra- 
cotta workers 


Carpenters and joiners 

Cotton-mill operatives 


Iron and steel workers 


Marble and stone cutters 

Masons (brick and stone) .... 

Mill and factory operatives 
(not specified) 

Millers (flour and grist) 



Painters, glaziers, and var- 

Plumbers and gas and steam 

Printers, lithographers, and 

Sawand planin g mill employees 


Tailors and tailoresses 

Tinners and tinware-makers. 

Tobacco and cigar factory 

Wood-workers (not otherwise 

Woolen-mill operatives 

Males. Females. Total. 

































































Carroll D. Wright. 



the influx of very cheap foreign labor. It may be 
said, with almost entire truthfulness, that the mining 
industry is the one that has chiefly suffered in 
various directions through foreign immigration. 

In 1795 the labor of the country was, as already 
stated, of a domestic character. Working-people 
were engaged in agricultural pursuits, the fisheries, 
and in the clearing of the forests, while a small per- 
centage were engaged in what is known as domestic 
manufacture and in commerce. The factory system, 
dating from 1790 as the year of its birth, did not 
become influential, so far as labor was concerned, 
until after 1820. With the complete estabHshment 
of textile factories, which occurred in 1813 at Wal- 
tham, Mass., which town has the honor of erecting 
the first complete factory in the world for the manu- 
facture of finished cloth, in all the various processes, 
from the raw material, labor began to find new ave- 
nues of employment, and the young women of the 
rural districts were induced to enter factories as 
spinners and weavers. The growth of the textile 
factory was rapid after 1820, both in the New Eng- 
land and the Middle States. Fair wages and easy 
work attracted the women of our own country and 
English girls, and until Irish immigration com- 
menced in earnest our textile factories were sup- 
plied with English and American girls mostly, but 
since their day there have been various changes. 
The American and the English girl stepped out of 
the factories and up into higher callings, and the 
Irish operative stepped in. The Irish operative has 
during the last twenty years or more, however, been 
giving way gradually to the French- Canadian and 
representatives of other nationalities. Practically 
during the last fifty years there have been three 
changes in nationalities in the operatives of our 
textile works. With the adaptation of steam and 
water-power in the textile industry other industries 
grew. Of course, all manufacturing received a great 
impetus during the Revolutionary War, when our 
people were obliged to furnish their own supplies. 
During the war the manufacturers extended their 
enterprises and built mills — which are sometimes 
called factories — but they were simple in their con- 
struction. At the close of the war all these efforts 
either ceased or the production of the mills was 
greatly reduced. 

The American nation found itself independent 
politically of Great Britain, but still a subject of it in 
respect to all its manufacturing interests. The Eng- 
lish government sought to prevent the planting of 
the factory system here, but through the ingenuity 
and perseverance of Samuel Slater, who had served 

his apprenticeship in the construction and manage- 
ment of factory machinery in England, the system 
was established in the United States; and then, as a 
result of the earlier legislation after the adoption of 
the Federal constitution, manufactures were stimu- 
lated and the era of industrial progress in this coun- 
try was opened. It can be said that the century 
from 1795 to the present year has been one of con- 
stant progress in the labor world, the factory sys- 
tem gradually taking over to itself industry after 
industry, until nearly everything is now produced 
under it. The old domestic or hand system has 
passed away almost entirely, and the regime of 
invention and machinery holds full sway. These 
great industrial changes have practically wrought a 
revolution in this and other countries, bringing con- 
stant employment to our working-people, and result- 
ing in a tendency all through the century to the 
increase of wages and a decrease in the cost of 

Along with this change in the method of produc- 
tion, mining has been developed to an enormous 
degree, until now the United States produces as 
much iron as the mother country. The development 
of iron-mining and the manufacture of iron have 
brought into employment a vast body of skilled 
workmen, and the ramifications of the industry still 
greater forces. Our large towns and cities are, as a 
rule, thoroughly equipped with sewers, and the 
manufacture of pipes and mains for this purpose, as 
well as the manufacture of gas-pipes and mains and 
plumbing work generally, has been the result. These 
latter changes have occurred within the last fifty 

The change in the system of work has practically 
done away with apprenticeships. Manual training 
and the work of trade schools are fitting boys and 
young men for skilled work in a better way than did 
the apprenticeship system, which was the universal 
rule at the beginning of our century. With the es- 
tablishment of the factory system apprenticeships 
were less obligatory. By 1850 the resort to them was 
waning, while since the vast development of the fac- 
tory system, especially subsequent to the Civil War, 
they have been still less prevalent. Another great 
change which has come in the way of industry is the 
employment of women. They were engaged only in 
domestic labor, except in rare instances, in 1795, but 
now there are few occupations in which they are 
not represented. The number grows from census to 
census. This change was brought about by the 
adoption of the factory system, under which women 
found they could attend light-running machines with 



skill and with fair remuneration. While their com- 
pensation is exceedingly low now in almost all indus- 
trial pursuits, yet it is something where nothing was 
received before. They constitute a new economic 
factor in industry, and being a new economic factor, 
they cannot as yet hope to receive liberal wages. It 
can hardly be said that they have displaced men, but 
they have displaced boys and girls to a considerable 
extent. The first tendency under the factory system 
was to employ children, and the number constantly 
employed increased from year to year, until during 
the last fifteen or twenty years, when the number has 
been rapidly on the decline. Public sentiment voiced 
by legislation, as well as the economies of production, 
is driving the children out of our factories : women 
are taking their places. In some industries men have 
taken the places of women, the change of the form of 
work resulting in such displacement. Laundry work 
is practically factory work now ; and the old domes- 
tic hand- weavers, who were to a large extent women, 
have seen their work transferred to the factory. 

These industrial revolutions have carried with them 
other changes, which perhaps are more ethical than 
economical in their relations. For instance, under the 
old system of labor, employers had a paternal rela- 
tion to their employees, and even in the early cotton 
mills in New England the paternal system of caring 
for employees was adopted. This was chiefly notice- 
able at Lowell, and later on also in Manchester, 
Conn., under the Cheneys' administration of the silk- 
works ; but as the factory system has spread this pa- 
ternal care has been lessened, although during the 
last few years there has been a great revival in the 
discussion of the usefulness of such paternal over- 
sight. The absolute necessity for the congregation 
of great bodies of working-people in one locality is 
everywhere stimulating the thought that there should 
be some other rule than that of entire non-interference 
with the welfare of employees. The public is consid- 
ering this question, and great employers here and 
there are trying the experiment of taking an interest 
in the home welfare of their employees as well as in 
their efficiency. 

The changes in the industrial system have had 
many ramifications. The labor movement in this 
country, that is, the organized attempt of labor to 
impress its aims upon the whole people, may be said 
to have begun with the century that is now closing, 
but it did not gain full headway until the nineteenth 
century was fairly on its way. This is true, notwith- 
standing the labor question has been present always 
in the development of the world; but contempora- 
neous with the development of the industries of the 

United States the movement, as it is now known, has 
taken place, and its speed has been accelerated as the 
industrial development has progressed. Prior to 
the establishment of the factory system there was lit- 
tle organization. Here and there a club of skilled 
workingmen existed. This was notably in the 
Eastern and Middle States. Since 1825, however, 
the movement has been rapid, and its results, while 
not always satisfactory, are indicative of real pro- 
gress. In the early years of the labor movement 
many arguments were advanced against it, and the 
attempt made to prevent workingmen from joining 
in organization. The merchants and ship owners 
of Boston, at a meeting held in the Exchange Cof- 
fee Rooms on May 15, 1832, voted to discoun- 
tenance and check what was called the unlaw- 
ful combination formed to control the freedom of 
individuals as to the hours of labor, and to thwart 
and embarrass those by whom they were employed 
and liberally paid. This meeting was emphatic in 
its declaration that there was a pernicious and de- 
moralizing tendency in combinations and an un- 
reasonableness in any attempt made by organizations 
to secure more favorable conditions of work. It was 
held everywhere that labor ought always to be left 
free to regulate itself, and that neither the employee 
nor the employer should have the power to control 
the other; and the old stock argument that organi- 
zation would drive trade from the country was re- 
sorted to then, as now, and a resolution was adopted 
at the meeting referred to, that the members of it 
would neither employ any journeyman who at the 
time belonged to a labor combination nor give work 
to any master mechanic who employed them while 
they continued pledged to their associations. These 
statements sound very much like those made at the 
present time, and yet the story of labor organization — 
its course, its successes, its failures, the philosophy un- 
derlying it, and the influence it has exerted in many 
directions — goes to prove that the world is growing 
better, and that the condition of labor as it now exists 
is a vast improvement upon its condition at any other 
period. This might be proved by an exhaustive cita- 
tion of wages and prices during the past 100 years, 
were such citation necessary. It may, perhaps, be 
well simply to say that wages, even during the past 
half-century, have increased, on the whole, something 
over sixty per cent., while the general course of prices 
has been downward. This is true of other countries 
in which machinery performs an important part in 
production, but it is essentially true in America, for 
here, with our vast resources, our peculiar systems of 
education and of government, exerting great influence 



upon the minds of all, wages are higher than in any 
other country in the world. The standard of living 
is necessarily higher, of course, and the workingman 
finds that he is able not only to preserve his working 
condition, but to participate in other things which 
are essential to his spiritual development. 

To-day organized labor has many defenders. It is 
looked upon with disfavor in some quarters, but I 
think, as a rule, employers are quite willing that their 
employees should organize, for they have their own 
organizations and do not feel like denying the right to 
others. Of course, a very large proportion of the 
working-people of this country are unorganized, and 
I presume this is true of manufacturers and employ- 
ers on their side; but as the methods of production are 
brought to a larger and grander scale, organization in 
every direction will more and more prevail. At pres- 
ent organized labor is estimated at 1,400,000, This 
is the result of an estimate based on the claims of 
different organizations. I am inclined to think it is 
too liberal an estimate, and yet, placed in compari- 
son with 15,000,000 wage-earners, it does not seem 
large ; but, as a rule, organized labor is employed in 
the manufacturing and mechanical industries, and in 
this sense the percentage is high. The proportion of 
organized manufacturers to the whole body is prob- 
ably much larger. 

As the labor movement has grown strikes have 
become more frequent, and while undoubtedly the 
era of strikes is passing away, yet it will be some 
time before the downward scale is reached as to 
numbers and importance. The great strikes in the 
country have had a marked influence in many direc- 
tions. They have excited working-people to under- 
take other strikes; they have brought bitterness 
between employer and employee, and yet on the 
whole they are bringing a new line of thought to the 
public mind, and their study will, I feel sure, result in 
good to all classes. Strikes are teaching the public 
its interests in industry as over against the personal 
and selfish interests of the two parties immediately 

The labor question has met with a great change as 
a result of the Civil War. Our negro population has 
lost some of the old occupations in which it was en- 
gaged in the North half a century ago, but it is gain- 
ing others. In the South the employment of the 
negro is becoming more varied and his condition 
more hopeful as one of pecuniary prosperity. Negro 
labor is abundant, good, and steady in certain lines. 
The question is often asked, whether the division of 
employment lessens the quality of work. I do not 
believe it does. The great principles of modem in- 

dustry are association, concentration, and specializa- 
tion. With the first the second is absolutely essential, 
and the third is the result of concentration. If these 
things lessen the quality of the work, then the op- 
posite must be true — that without them quality is im- 
proved. This carries the argument too far. If there 
is much truth in it, then the simplest, humblest kind of 
work is best for the worker. Sawing wood and pav- 
ing streets, the most ordinary manual toil, are better 
for the worker than the employment of his intellect 
in tending a machine. A study of all the facts leads 
to the positive conclusion that the division of employ- 
ment does not lessen the quality of the worker when 
considered as a man. 

Working-people have experimented with coopera- 
tion, profit-sharing schemes, and other methods of 
increasing wages. These experiments have in many 
instances proved failures; in others, successes. 
They are likely to do some good, but it will be a 
long time before the moral character of the men in- 
volved will permit successful management of co- 
operative schemes. The principle is right. The 
cooperative principle is that of our modem system 
of industry. Pure cooperation, probably, cannot 
succeed, from an economic point of view, but the 
cooperative spirit can prevail to a higher degree 
than it now does; and all these things — combinations 
of workingmen, public sentiment, economic condi- 
tions (and the latter more largely than any other) — 
have reduced the hours of labor from eleven, twelve, 
and thirteen per day to eight, nine, and ten per day. 
These changes, however, came gradually, and as the 
result of improved methods of production. 

After the economic changes were assured law 
stepped in and made the custom the public voice. 
The first ten-hour law in this country, however, was 
not passed until 1874, when the State of Massachu- 
setts provided that women and children should not 
be employed over ten hours a day in the textile fac- 
tories of the State. Another specific change which 
has come is the frequent payment of employees for 
their services. The method in former times was to 
pay the working-people part in cash and part in 
goods, and settlements were made at long intervals. 
Now everywhere, with a few exceptions in the West, 
where to some extent the truck system still prevails, 
cash payments at short intervals are the rule. This 
change has been brought about both by public senti- 
ment and by statutory enactments. 

One of the greatest changes which has been 
wrought by the new system has come through cor- 
porations. When the century began, the working- 
man and his employer were practically associated; 



they worked side by side ; they had a personal ac- 
quaintance each with the other, and their interests 
were, to a large extent, practically the same. With 
the establishment of the factory system there came 
the necessity of using large capital, more than one 
man or a firm of men contributing ; so the corpora- 
tion became a necessary factor in the development 
of industry. Many small stockholders aggregated 
their means and made a large capital. The inter- 
ests of the stockholders had to be administered by 
a corporation government, and this corporation gov- 
ernment employed men and women. The ethical 
relations were changed at once. As a great capital 
is now the result of the aggregation of small savings 
in many respects — although in some instances the 
stockholders are heavy capitalists — the organization 
of labor has grown on the ground that one organi- 
zation should deal with another; that if the stock- 
holders lose their personality and are represented by 
a manager, the large body of working-people lose 
their personality, and their interests should be repre- 
sented by a manager or a committee. One of the 
vital changes resulting from this growth of corpora- 
tions is the liability of the employer to the employee 
for damages received while in the employment of 
the corporation. The old common-law rule relating 
to the liability of employers for accidents occurring 
to their employees is that a workman cannot recover 
damages for injuries received through the carelessness 
or negligence of a co-employee, although a stranger 
may recover for an injury following the same care- 
lessness or negligence. This rule grew up under the 
domestic system,when employer and employee worked 
side by side, and each knew the character and skill 
of the other, and when several workmen working 
together were supposed to be acquainted with the 
risks of their occupation as well as with the character 
and skill of their co-employees. But when expanded 
methods are introduced this old rule becomes some- 
what ridiculous; for co-employees maybe a brakeman 
and a switch-tender, and under this rule a brake- 
man on a train running, perhaps, 500 miles, could 
secure no damages whatever from a railroad cor- 
poration employing him, in consequence of any in- 
juries received through the carelessness or negligence 
of a s^vitchman along any part of the line, although 
the brakeman knew nothing of the switchman, had 
no knowledge of his skill or capacity when he en- 
gaged with the company, and in no sense of the 
word, so far as risk and association of service were 
concerned, could be considered the co-employee of 
the switchman. Yet, as the common-law rule grew 
up before great industrial enterprises were estab- 

lished, courts have projected it, and have ruled that 
in such a case as that just mentioned the switchman 
and brakeman were co-employees, and that therefore 
the employer could not be held liable. This rule is 
being broken down by statutory restrictions in differ- 
ent parts of the world, although it has not generally 
been modified, and still holds good in many States. 

There are very many other points where changes 
in relationship have been made by the change in 
system. Looking the field over broadly, the con- 
clusion must be reached that on the whole the work- 
ing-people have been gainers during the progress of 
the past century — gainers not only in wages, both 
real and nominal, but in their relations to society ; so 
with the facts briefly stated we may well consider 
such relations and the general philosophy of Ameri- 
can labor conditions. 

De Tocqueville, when studying this country, ob- 
served that amongst a democratic people where 
there is no hereditary wealth every man works, or 
has worked, to earn a living, or is the son of parents 
who have worked, and that in such a community 
the notion of labor is presented to the mind on every 
side as the necessary, natural, and honest condition 
of human existence ; that in America even a wealthy 
man thinks he owes it to public opinion to devote 
his leisure to some kind of industrial or commercial 
pursuit, or to public business, and would think him- 
self in bad repute if he employed his life solely in 

These reflections of De Tocqueville, conveying 
the idea of life or of actual living, are stimulated by 
all the elements which make up the essential char- 
acteristics of this period. Nearly all the great for- 
tunes, as they now exist, have been built upon the 
actual toil of some industrious ancestor. It does 
not do for our wealthiest people, if they wish to be 
called simply aristocratic, to look beyond a genera- 
tion, or, at the most, three generations, to find their 
ancestry engaged in arduous labor, building from 
that condition to a business career, and leaving be- 
hind them at its close possessions upon which have 
been erected great fortunes. In some instances, to 
be sure, present fortunes are the result of fortunate 
speculation or investment in real estate, but the rule 
is the other way, and as first stated. 

The American nation consists of workers ; and at 
the present time more than at any previous period 
the younger members of very wealthy families are 
devoting their time and service to labor as assiduously 
as if their subsistence depended upon their earnings. 
In America, therefore, labor holds a more honora- 
ble place in the minds of all the people than it does 



in any other land, and individuals can look forward 
to the highest class of associations, both social and 
intellectual, as a result of their application of skill, 
provided always they are ruled by integrity, and 
shall build up a character which will sustain itself 
under all conditions. A workingman may not en- 
ter the highest social ranks while a workingman, es- 
pecially in dense social centres, but in our country 
villages and large towns observation teaches that the 
American workingman has the entree to the best so- 
ciety in his community, without regard to the size 
of his bank-account, character being the card on 
which he gains his admission. I have attended so- 
cial functions where I have met skilled mechanics 
and wealthy men, and have found them meeting on 
an equality, each regarding the other on the basis of 
the personal character which he brought to the 

There is another side to this, of course, and a 
picture of certain features of American labor can be 
drawn under which the individual feels that he 
must keep at the bottom, at least, of the social 
ladder. A study of conditions, however, proves 
that the base of the social structure is growing nar- 
rower as time, as education, as a wise altruism lead 
men out of their lowly conditions to a better plane; 
and the American laborer everywhere is an active, 
earnest, and, I believe, an honest factor in keeping 
up the struggle to secure a higher standard of liv- 
ing. If the facts were otherwise the outlook would, 
indeed, be a despondent one ; but a glance at the 
facts proves the reverse, and shows that the propor- 
tion of wage-earners to the total population is con- 
stantly increasing. 

Our 15,000,000, and over, of wage-earners con- 
stitute a vast body on whose prosperity, intelli- 
gence, and moral worth is based the welfare of the 
Republic. With their happiness goes the happiness 
of the whole people. When they are unhappy, dis- 
turbed, and discontented the Republic is resting upon 
an insecure foundation. I do not mean that discon- 
tent can or ought to be removed, it being not wise 
that perfect contentment should rule in all things, 
for perfect contentment means a stationary condi- 
tion. Progress can come only when the body of 
workers in a community are contented because 
moving onward and upward. Absolute " content- 
ment with one's lot is the virtue of the subjects of a 
despotically governed and non-progressive state," 
and this sort of contentment does not indicate hap- 
piness, but a stationary condition, which ultimately 
leads to retrogression, a loss of ambition, and the 
growing disuse of the inventive genius of man. 

Our American wage-earners demand, and are enti- 
tled to, something more than is indicated by con- 
tentment, for their experience with inventions, and 
under our educational system, teaches them that 
from rude instruments of toil they have become 
intelligent factors, in both a social and a political 
sense. They are not simply animals, wanting an 
animal's contentment; they are something more, 
and they want, and are entitled to, the contentment 
belonging to the best environment. They are, in a 
sense, and a valuable sense, the patrons of all that 
gives character to a great nation. They believe in 
education, in art, in music, in the progress of the 
sciences, and in political purity, and are informing 
themselves on the great topics which engage the 
thoughts of our statecraftsmen. They are often 
able not only to present their views clearly and 
forcibly, but to indulge in discussions which would 
be a credit to any legislative body. These features 
constitute the American wage-earners' exceedingly 
active, and, in a short-sighted way, sometimes un- 
comfortable, elements in the great struggle that is 
going on to lift themselves and all connected with 
them to a higher plane of living. All who aid in 
this struggle are the friends of humanity; all who 
throw obstacles in its way are the enemies of 
humanity — not knowingly, perhaps, but because 
they cannot reach far enough in their comprehen- 
sion of conditions, and growing conditions, too, to 
see that happiness and prosperity must be the result 
of the struggle. Selfishness and ignorance would 
keep men on a level ; progressive movements mean 
more, and look to the leading forth of all the best 
faculties of all members of the community. 

All the disturbances which we have seen during 
the past score of years, and which seem, super- 
ficially considered, to indicate that we are approach- 
ing an industrial war, are but protests against fixed 
conditions. These disturbances very often arise 
from unwise considerations and from ignorance of 
the conditions of production, but they all indicate 
one grand trend ; and while it is to be hoped they 
will grow less and less as intelligence develops the 
unwisdom of certain forms of contest, they must be 
considered as a part of the progressive movements 
of our age, to be deprecated, to be sure, when there 
is an inimical animus underlying them — to be dep- 
recated, perhaps, in most instances — and yet, out of 
them, American labor emerges with a clearer under- 
standing of the inevitable conditions of life and a 
clearer view of the higher ethical elements essential 
to overcome them. These views constitute the chief 
elements of what is known as the labor movement. 



in which American labor has actively participated 
for a great many years — first, seeking organization; 
second, by organization, making its protests and 
issuing its demands. Philosophically, these protests 
and demands must be viewed as educational factors 
and not as war factors. 

I have always liked the definition of labor which 
John Ruskin has given us. " Labor," he says, " is 
the contest of the Hfe of man with an opposite ; the 
term * life ' including his intellect, soul and physical 
power, contending mth question, difficulty, trial or 
material force. Labor is of a higher or lower order 
as it includes more or fewer of the elements of Hfe ; 
and labor of good quality, in any kind, includes 
always as much intellect and feeling as will fully 
and harmoniously regulate the physical force." 
The truth of this definition must be accepted, and 
with its acceptance the labor movement, so-called, 
is at once lifted from a sordid to a high ethical 
plane; taken out of narrow grooves and made to 
become the very essence of the whole of the relig- 
ious and political movements of the closing years of 
this century. Whether Ruskin's definition is recog- 
nized or not, the truth exists, and so the struggle of 
the wage-earner becomes of that high order which 
insists upon recognition as a factor in securing to all 
people something beyond the mere wants of exist- 
ence. A man who is working simply to secure food, 
shelter, and raiment, that is, the conditions abso- 
lutely essential to keep him an efficient working 
machine, is not the best product of civilization; 
but the man who is willing to work industriously to 
secure these absolute necessaries to make his serv- 
ices efficient, and then, over and beyond them, 
something of the spiritualizing necessaries of life, is 
a credit to our civilization ; and these spiritualizing 
influences can be secured only when, after paying 
for the necessary lubrication of his working muscles, 
he is able to furnish himself and his loved ones with 
elements of life which have heretofore been consid- 
ered luxuries. He must be able to secure some- 
thing of these higher elements, or he loses, and 
retrogression is the result. He must be able to 
educate his family, and to give them of the best 
things of life to such an extent that they become 
active participants in the results of invention, which 
throw around life everywhere more than could be 
secured under old conditions. 

With his conscience quickened by the very atmos- 
phere that surrounds him, the wage-earner under- 
stands, more than any other wage-earner anywhere, 
that the sacredness of property must be insisted 
upon and preserved, and that all attacks upon ex- 

isting institutions must be repelled, especially when 
those attacks are made for the purpose of destruc- 
tion with a view to the building of a new structure 
upon the ruins of the old. He is often radical in 
his political views, but as a class in the community 
he is ready to aid in the improvement of govern- 
mental and social structures rather than to assist in 
their destruction, even when the view is presented 
that only on their destruction can a properly devel- 
oped new structure be erected. He is often led 
away by specious arguments, and under such condi- 
tions allies himself to various so-called progressive 
movements; but he is always open to conviction, 
and when he sees that he is simply being led on the 
old, well-beaten paths of iconoclasm, he turns and 
allies himself with those who are seeking real and 
true progress through evolutionary processes. 

The American workingman is sometimes a social- 
ist, but he does not believe that socialism, and espe- 
cially political socialism, has anything in it which 
will help him to secure the coveted margin over 
necessaries — anything that will help him to things 
spiritualizing. He is a socialist, as a rule, in a cer- 
tain sense, but his socialism is not political; it comes 
from a spirit within him, and it seeks to aid all who 
are engaged with him in the struggle to secure better 
environment. This sort of socialism in American 
labor has no danger in it. On the other hand, it 
is critical in its nature, and thus helps the whole 
body of the people to understand what evils exist 
and what conditions ought to be secured in their 

The American laborer, as such, is never an an- 
archist, for he is a law-and-order man, and believes 
that through development of the individual char- 
acter the best social conditions can be reached. Now, 
as the wage-earners of this country comprehend these 
high and moral grounds more fully and more clearly, 
they will become more contented in the true sense — 
not contented to stand still, but contented with the 
knowledge that they are progressing. 

From what has been said it will be clearly under- 
stood that conditions are not always favorable; that 
there are fluctuations, business depressions, having 
their discouraging influence, and strikes, unsettiing 
the public mind. The clash between ethical and eco- 
nomical conditions leads to disruptions sometimes in 
business associations, and arrays, to all appearances, 
capital on the one side and labor on the other, and 
gives color to the prophecy sometimes put forth that 
ultimately this clash will lead to bloody strife. I 
cannot acquiesce in this view, although I see clearly 
the clash itself, and largely the causes for it. The 



causes are mostly ethical, growing out of the rela- 
tions of men and the lack of appreciation of the duty 
which is owed to the public. Macaulay said that 
the evils arising from liberty were only to be cured 
with more liberty. So the evils which apparently 
surround us at the present time, and which appar- 
ently grow out of the industrial world, are the results 
of an intelligence which did not exist in the past, and 
the cure for them is more intelligence. Capital and 
labor are intelligent enough to get into difficulty : 
they are not intelligent enough yet to keep out of diffi- 
culty. It requires a very high moral character on the 
part of both employer and employee for each to rec- 
ognize the rights and the privileges of the other; but 
with this recognition, quarrels, as such, will largely 
cease, and contests of mind will take the place of 
those unhappy contests which are now so frequent. 
When the employee recognizes that his highest social 
duty is to render the very best service of which he is 
capable, and the employer recognizes that his highest 
social duty is to compensate the best service with 
the best wage, a vast deal of friction will be avoided. 
Integrity of business involves both the employing 
and the employed elements of society. Confidence 
in each other is the surest cure for many of the dif- 
ficulties, and while the world is growing altruistic, 
it will not grow altruistic at the expense of individ- 
ual development; but after the rendering of the best 
social service there will come a coordinated force 

involving both altruism and individualism. Either 
means destruction in a degree. Coordination means 
success and reasonable happiness. The ethical force 
cannot rule at the expense of the economical, nor can 
the economical force rule at the expense of the eth- 
ical. Their coordination is the true line of progress. 
As American labor comprehends this more and 
more clearly, and I believe it is comprehending 
these principles, and as the employer comprehends 
them more and more clearly — and I believe that he 
is so doing — we may hope for the adjustment of dif- 
ficulties on a plane of moral responsibility not yet 
reached, except incidentally. The settlement of labor 
controversies is one thing, their prevention another. 
If the intelligence of different elements has not reached 
that degree whereby they can be prevented, then 
there should be some recognition of that settlement 
and adjustment which recognize the importance of 
each side in the success of industrial enterprises. Amer- 
ican labor is doing much, and can do much more, in 
bringing about such prevention and such adjustment. 
May every struggle to that end meet with the cordial 
appreciation and support of all right-minded citi- 
zens ! The century closes with omens of this con- 
summation. We must not look for Utopias nor the 
millennium ; but we must look for the evolution of 
moral forces through industrial forces, for society 
flourishes or decays as industrial elements prosper 
or decline. 



THE imports and exports of the United States 
are the expression and measure of its com- 
mercial dealings with the nations and peoples 
of the world. Their development and importance 
have been commensurate with the economic growth 
and political power of the country and people. To 
compare the foreign trade of the United States in 1 795 
with that in 1895 would be to compare a wheelbarrow 
with a locomotive or an ocean liner. The local na- 
ture, the simplicity of character, and the limited quan- 
tity of the trade in the earlier period have become the 
world-wide, the complex, and enormously extended 
commerce of to-day. Then the trade was confined 
as well by the limited markets as by the selfish greed 
of nations possessed of colonial dependencies, mo- 
nopolized by themselves in production and in com- 
merce. Then the long and comparatively infrequent 
voyages made commerce a matter of speculation, 
of widely fluctuating prices, of capital at risk, and 
consequently of doubtful returns. Now the world 
is one great market to buy and to sell in. Prices are 
equalized and made stable by banking facilities, by 
rapid communication by mail or telegraph, by fre- 
quent voyages, and by the free and cosmopoHtan 
movements of labor and capital. The millions ven- 
tured in foreign trade in the last century have be- 
come the hundreds of millions embarked in foreign 
trade to-day ; and over and above the great transfer 
of commodities from country to country there is a 
large and ever-increasing transaction in securities, 
national. State, and corporate. Mere statistics can 
convey only one idea of this growth and develop- 
ment. They may point out the mass or quantity, 
which is the least interesting and vital phase of the 
question ; but the nature or character of that mass 
has also materially changed. It is on this change 
of nature that I wish to say something. 

When the peace of 1783 was declared the United 
States comprised a strip of territory on the At- 
lantic Ocean extending from Maine to Florida, and 

bounded on the west by the Mississippi River. In 
1790 the total area of settlement v/as 239,935 square 
miles, having a population of 3,929,214 souls. In 
this comparatively limited area important commer- 
cial products were raised. The tobacco of Virginia 
and Maryland supplied the world ; the rice and in- 
digo of the Carolinas stood high in European mar- 
kets ; and the fish and lumber products of New Eng- 
land, with the breadstuffs of the Middle States, gave 
a large and profitable commerce with the West Indian 
Islands, then colonial possessions of Europe. In 
New York the fur trade centered, and even as early 
as this time the Northwest Territory pointed to an 
agricultural possibility which fifty years later was 
to begin an economic revolution in Europe, the re- 
sults of which are still incomplete. The extension 
of national territory west of the Mississippi, and 
southward so as to include Florida and Texas, has 
contributed to develop commerce on almost the 
same lines which were marked out in the first years 
of the Republic. 

It was agriculture in 1795 which contributed most 
largely to the export trade ; it is agriculture in 1895 
which still feeds the largest part of the exports. 
The rise of cotton culture, and its rapid extension 
through the South, were the leading features of our 
export development for fifty years. The rapid set- 
tlement of the West, and an enormous extension of 
agricultural production in cereals and provisions, 
were the leading features of the subsequent forty 
years. Beginning with 1816, the establishment of 
manufactures, fostered and assured by the peculiar 
inventiveness of Americans, laid the foundation of 
industries which at the end of eighty years are fitted 
in many lines not only to compete with, but almost 
to supply, the world. In 1895 the estimated popu- 
lation of the country was 70,000,000 and the area 
of the country in land surface was 2,970,000 square 
miles. The value of domestic exports per capita 
of population in the last decade of the eighteenth 




century was somewhat less than $6 ; the per capita 
exports in 1895 were over $11, The productive 
capacity of the country has thus been sufficient to 
feed, clothe, and support in increasing comfort a 
population which has increased in numbers seven- 
teenfold ; and at the same time afforded a surplus 
which has given an export trade double in relative 
importance and increased fifty or sixty fold in abso- 
lute value, as the $800,000,000 of 1895 represent an 
enormous trade, conducted on a basis of low prices, 
compared with the trade of 1795, conducted under 
the regime of high prices. 

The lasting and substantial qualities of American 
export trade are proved by its survival of accidents 
and adverse conditions which threatened at times 
to overwhelm it. The Napoleonic wars practically 
closed the ports of the civilized world to American 
products and American shipping, and the disaster 
was aggravated by the domestic Embargo. Wild- 
cat banking schemes have periodically swept over 
the country, entailing wide-spread ruin and economic 
disturbance, shaking the commercial system of the 
country to its very foundation. State and corpo- 
ration repudiation and defalcation have at times 
thrown a cloud over American interests, and have 
retarded development, while even destroying some- 
thing of what had already been accomplished. To 
these exceptional and preventable conditions should 
be added others which the economist has recognized 
as periodic and inevitable — recurrent waves of finan- 
cial distress and commercial depression, which have 
seemed to follow a definite law, and yet can never 
be foreseen, or their effects provided against and 

The geographical distribution of exports would 
necessitate a sketch of the changes in political divi- 
sions throughout the world during the century. The 
breaking up of the old colonial system and the rise 
of independent States and powers, the formation 
of aUiances essentially modifying the sovereignty of 
political divisions, have introduced so many new 
conditions that the geographical nomenclature of 
1795 will not apply in 1895. The great Spanish 
and Portuguese colonies in the New World have 
with few exceptions become emancipated from the 
mother countries, and as independent powers have 
sought and developed commercial connections pro- 
hibited under the mercantile system of the last cen- 
tury. Central and South America have framed and 
maintained commercial systems of their own, instead 
of feeding and supporting a commerce profitable 
only to the mother state. The Floridas in 1795 

were counted among the possessions of Spain. Hayti 


was a French colony. Germany had no existence as 
a united power, and the Hanse towns represented 
commercial Germany. The trade with Canada was 
of little importance. Australia was a geographical 
name. Texas was part of a foreign country, as was 
all westward of the Mississippi ; and the exchange of 
merchandise with Africa and Asia, while important 
even at that day, was Hmited in its development by 
local hostihties and by trading monopolies. 

The embryonic condition of exports is shown by 
the distribution of 1795. Of a total of nearly $48,- 
000,000 outgoing, $31,000,000 were sent to Euro- 
pean countries, $14,000,000 to the West Indian 
possessions of those countries, and $3,000,000 to 
all the rest of the world. The intimate connection 
between political and commercial conditions is shown 
by the fact that the exports to France and the French 
West Indies were $12,653,635 ; to the Hanse ports, 
$9,655,524 ; while to Great Britain and her posses- 
sions in the West Indies and North America the 
exports were $9,218,540. France ranked first in 
importance, Germany second, and Great Britain 
third. The treaty of Jay and the necessities of the 
British West Indies made necessary some alterations 
in the regulations imposed by Parhament on colo- 
nial trade, and these changes were reflected in the 
current of the leading exports of the United States. 
France lost her dominant position and was super- 
seded by Great Britain. This relative position has 
never been changed. 

A study of the yearly fluctuations in the export 
trade, and a general statement of the leading causes, 
would be of exceeding interest. Each article would 
present the material for a study of commercial con- 
ditions as influenced by competition, production, or 
political factors. This, however, would be out of 
the question in an article of this length. The high- 
est development of exports has occurred within the 
last thirty years, when the rapid settlement of the 
West, and the improved methods of transportation 
have enabled its products to reach a market at such 
rates as allow aggressive competition with similar 
products of other exporting countries. Without 
modern appliances the large export trade in fresh 
meats, butter, fruits, and even oleomargarine, could 
not exist. 

Another side of this story is of high economic 
value, showing how a productive interest may wane 
and die through the rise of more favorable condi- 
tions elsewhere for producing or marketing, or by 
the discovery of other products which will better 
attain the end to which they are the means. In 
the same manner an interest may out of a very small 



beginning become sufficiently important to control 
the market of the world. A century ago indigo was 
a large product of the Carolinas ; it ceased to be an 
article of export, in quantity, at the beginning of the 
century. The United States was a large exporter 
of rice in 1795 ; in 1895 it was an even larger im- 
porter. Forty years ago whaling was a profitable 
pursuit, and whale and fish oils constituted an item 
of export. That industry has almost disappeared as 
a commercial factor ; but the $2,000,000 or $3,000,- 
000 worth of whale-oil has been more than compen- 
sated by the $45,000,000 of exports of petroleum, 
an article which came into use about thirty years ago. 

The ills of other nations have at times redounded 
to the benefit of the United States. European wars 
created an opening for the prepared meat products 
of the West ; the vine diseases in the wine countries 
of Europe gave an opportunity for an export of 
American wine — an export which must grow. Coal 
was not sent abroad in any quantity till 1850, but it 
now represents a trade of more than $10,000,000. 
Cotton was imported from the West Indian Islands 
in 1795 ; it has long been the principal item of ex- 
port. Copper, when it touched $2,000,000 in the 
trade retvu^s of 1858, was believed to have reached 
a very high point ; but that product of the American 
mine now controls the world's markets, and an ex- 
port of $13,000,000 is not believed to have touched 
an even reasonable limit. 

In 1895, seventy per cent, of the total value of 
domestic exports was composed of agricultural pro- 
ducts. The products of the fisheries and of the 
forest and mining, partaking of the qualities of agri- 
cultural products in being subject to the law of 
diminishing returns, raised the proportion to seventy- 
seven per cent., leaving about twenty-three per cent, 
contributed by American manufactures. The arti- 
cles of food and the crude materials of manufactures 
are exported to countries which have developed in- 
dustrial rather than agricultural systems, and which 
need the food to support their laboring populations, 
and the raw materials to feed their industries. So 
long as the United Kingdom held almost the mo- 
nopoly in the great manufacturing industries where 
machinery has superseded hand labor, our export 
trade was chiefly with that country. Within twenty- 
five years the rise of large manufacturing interests 
on the Continent, and the extension of merchant 
marines of continental countries, have been reflected 
in the direction of American exports. What would 
formerly have gone to Great Britain and thence been 
distributed throughout continental Europe is now 
sent to the continental countries direct. 

To sum up, the United States export trade con- 
tributes the cotton used in cotton manufactures 
wherever the industry is developed; by its bread- 
stuffs and provisions it contributes a necessary ele- 
ment to the support of the industrial peoples of other 
lands, supplying a cheap and wholesome food; its 
mineral oils are to be found everywhere, giving a 
cheap and safe light to peoples who have lived here- 
tofore in semi-darkness ; its tobacco has always been 
appreciated, as have its naval stores ; its agricultural 
implements and tram-cars, its clocks and watches, 
and its rubber goods are evidences of a superior 
inventive ability. The lines of the export trade of 
the United States are so broad and well defined that 
nothing within the reach of human possibilities can 
destroy their main features. 

The imports do not require the special study that 
exports seem to demand. The latter are a fair gauge 
of the productive capacity of the country, for it is 
only the surplus product which can be exported — 
that which is beyond domestic consumption. Im- 
ports measure the purchasing ability of the people 
and constitute a rough measure of the industrial 
advancement and of the degree of taste and well- 
being attained. The development of the import 
trade has been a process of selection, rejecting one 
class or article and taking others, as the domestic 
supply is sufficient or wanting. In the last century 
all manufactures of a grade above the crudest were 
brought in from abroad. There were few "indus- 
tries " outside of the household industries, and con- 
sequently little or no demand for raw material of 
manufacture. A little cotton was imported; some 
lead from England ; and hemp, cordage, and cables 
from Russia gave material for ship building; but 
these few articles comprise all the imports which 
can be directly identified with " industry." In 1795 
a little unwrought steel came from the United Neth- 
erlands; somewhat later Swedish bar-iron took its 
place ; but manufactured iron and steel have come 
from the United Kingdom. 

Compared with such a situation, the imports of 
1895 offer a striking contrast. That there are a 
large number of commodities of almost necessary 
consumption which cannot be grown or prepared 
in the United States needs no proof. Tea, coffee, 
sugar, spices, and such tropical products can be ob- 
tained in the required quantities by exchange more 
easily and cheaply than by growing them. Articles 
of food will, therefore, always constitute a large item 
of imports, and in 1895 constituted one third of the 
total. Imports of the crude materials of manufac- 
tures — wool, cotton, flax, and hemp, coal and iron, 



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and silk — constitute a measure of industrial growth 
and conditions. By the establishment of domestic 
industries, and by the refining of demand through 
the accumulation of wealth and the education of 
taste, better products are demanded of both foreign 
and domestic manufacture. In 1895 the imports of 


thirds of the entire imports are received through 
New York, and more than one half of the exports 
are sent out through that port. The main geo- 
graphical features of the foreign commerce of the 
United States are shown by the accompanying 
figures : 


North America .... 
South America. . . . 




All other countries 


Atlantic ports 

Gulf ports 

Pacific ports 

Northern border and lake ports 
Interior ports 

Total $731,969,965 















Per Cent. 





















Per Cent. 







16. 1 



Per Cent, of Im- 
ports AND Exports. 










materials in a crude condition for use in domestic 
industries comprised more than one fourth of the 
total imports. What remained were articles manufac- 
tured which could not be obtained in this country 
to meet the tastes of the consumer or to gratify the 
whims of fashion. The crude materials are, as a 
rule, obtained from agricultural countries of recent 
settlement, or from older countries sparsely popu- 
lated, with a semi-civihzed people. Australia is the 
great source of wool-supply ; Cuba of sugar, Brazil of 
coffee, Asia of silk, Egypt of raw cotton, and South 
American countries of hides, skins, and india-rubber. 
Manufacured articles are of European origin. 

A word may be added on the geographical dis- 
tribution of imports and exports in 1895. The 
United Kingdom received forty-eight per cent, of 
the exports and contributed twenty-two per cent, 
of the imports. No other country approaches this 
percentage in American trade. The natural advan- 
tages of the harbor of New York long since pointed 
it out as a great commercial center ; while the enter- 
prise and liberality of State and citizens in making 
internal improvements have enabled it to maintain 
a dominant position in the face of intense and ap- 
parently almost destnictive competition. Canals 
and railways and banking institutions having foreign 
connections have made the city what it is. Two 

Foreign commerce must grow with the increase 
of population and wealth. From time to time fears 
have been expressed that the United States is not 
holding its own in foreign markets ; that its products 
are being undersold by similar products of other 
nations. Russian and Indian wheat, Indian and 
Egyptian cotton, Russian petroleum, and, last, the 
grain products of the Argentine Republic, have ex- 
cited apprehensions the full extent of which have 
never been realized. That competition from the 
outside must produce some effect need not be ques- 
tioned ; but that this effect could ever end fatally to 
the productive interests of the United States is be- 
yond belief. If the agricultural products of our 
country no longer meet with favor in foreign mar- 
kets, there will always be room for our manufactures, 
the export of which has shown in recent years a 
marked increase. In 1875 the value of exported 
manufactures was $92,678,814, constituting 16.57 
per cent, of the total exports. In 1895 the value of 
manufactures was $183,595,743, constituting more 
than twenty-three per cent, of the total. It is in 
this direction that the greatest development of 
American exports must lie ; and the field is so vast 
that it will more than compensate for any reduction 
in demand for food products or for materials in a 
raw condition. 




THE colonies, under the lead of Massachu- 
setts, early attempted to provide roads ; yet 
for more than two hundred years nothing ex- 
isted in this country that by any stretch of the ima- 
gination could be called a postal service. The only 
carriers of commerce for nearly two hundred years 
after the first settlers sought these shores were the 
simple saihng vessels, that crossed the ocean only at 
the greatest hazard. Courageous attempts to navi- 
gate the ocean waters and the almost unknown rivers 
and lakes were numerous before 1800, and canals, 
even, were attempted. It can hardly be said, how- 
ever, that anything deserving the name of interstate 
commerce existed in this country at the beginning of 
the present century, since at that time the total effects 
of the government were transported from Philadelphia 
to Washington in a frail sloop, and President John 
Adams and his wife lost their way, as tradition has 
it, in the woods beyond Baltimore, as they proceeded 
in their carriage toward the new capital. The AUe- 
ghanies constituted an almost impassable barrier be- 
tween the East and the West, and such necessary 
products as the colonists could not obtain in their 
immediate neighborhoods were mostly brought from 
over seas. 

There was another difficulty in the way of trade. 
The high price of labor rendered it impossible to 
manufacture linen, cotton, or woolen cloth, except 
at a cost twenty to fifty per cent, greater than the 
same stuffs could be turned out for in England. The 
trade of New Hampshire was principally in lumber 
and fish, which were exported. In Massachusetts a 
little wool and flax were worked into a coarse cloth, 
and a few hats were made, but it was cheaper to 
import them. In the province of New York the ex- 
port of furs, whalebone, oil, pitch, tar, and provisions 
included everything. So it was in New Jersey. 
Virginia produced nothing for intercolonial trade. 

Tobacco was a permanent staple, but it became 
chiefly an export. The early colonists were inevi- 
tably sailors. Therefore a considerable coasting trade 
grew up, but there were no means of internal trans- 
portation except by wagons and the rude craft plying 
the natural waterways. In spite of this the Consti- 
tution, which went into operation March 4, 1789, 
embraced the right to regulate domestic commerce, 
— a right not conferred by the previous Articles of 
Confederation, — and from that year one may find 
exhibits of the tonnage employed in the coastwise 
trade. In 1789 this tonnage was 78,607; in 1812 
it was 477,971. 

The Americans of those early times had only a 
vague knowledge of the country west of the moun- 
tains ; yet the hardy settlers along the coast soon beat 
out for themselves paths to this unknown region. The 
act to provide for the Cumberland road was passed 
in 1806, and the first stage-coach driven from Cum- 
berland to Wheeling in 181 8. The length of the line 
first opened was 130 miles, and its cost $1,700,000. 
In those years, too, were tried the first experiments 
with steam-craft. Livingston and Fulton built the 
Clermont in 1807, and Fulton claimed under his pat- 
ent a monopoly of transportation on the Hudson and 
other rivers. His claim was carried to the courts 
and defeated, so that after 181 5 the rivers of the 
country were free to steam-vessels. In 1812 steam- 
boats made their appearance on the Western rivers. 
The first craft, the New Orlea/is, built at Pittsburg 
by Fulton at a cost of $40,000, a stern-wheeler of 
between 300 and 400 tons, put out for New Orleans. 
Others followed, but none proved able to ascend the 
river, until 1 8 1 5, when the Enterprise, a stern-wheeler 
of 70 tons, made the trip from New Orleans to Cin- 
cinnati in twenty-eight days. It was later than this, 
again, that steamships came gradually to ply up and 
down the coast. 




The first charter for canal building was granted to 
the James River Company by the legislature of Vir- 
ginia in 1 785. Another of these projects was the Dis- 
mal Swamp Canal, begun in 1 787, under a joint char- 
ter from Virginia and North Carolina, and opened 
in 1794. The owners of its stock included George 
Washington and Patrick Henry, and it was origi- 
nally designed to facilitate the movement of lumber 
out of the Dismal Swamp. The Chesapeake and 
Ohio Canal, the Delaware and Chesapeake Canal, 
and the Union Canal, of Pennsylvania, intended to 
connect the Delaware and Susquehanna rivers, were 
only forerunners of the Erie Canal, 363 miles long, 
completed in 1825 A canal from Lake Champlain 
to the Hudson River was completed in 1823. On 
the opening of the Erie Canal the cost of freight 
fell, according to its class, all the way in amount 
from $15 to $25 per ton, and the time of transit 
from twenty to eight days. Wheat was worth $^3 
per ton in western New York, and it did not pay 
to send it to market, down the Susquehanna to Bal- 
timore. The canal changed all that. Indeed, it 
has been said that the Erie Canal added $100,000,- 
000 in value to the farms of New York State. It 
made New York City the commercial metropolis. 
Freight which had gone overland from Ohio to 
Pittsburg and Philadelphia, at a cost of $120 per 
ton, now went to New York by way of the lakes, 
the great canal, and the Hudson. The opening of 
the Erie Canal excited also a fever of enterprise in 
canal building in Ohio, Pennsylvania, Massachusetts, 
Maryland, and Virginia. 

The first voyagers on the Great Lakes, La Salle 
and Hennepin, set sail in 1678 in a schooner of ten 
tons, which they had launched near the present city 
of Kingston, Ontario. From the mouth of the 
Niagara River they continued their journey by land, 
and in the following May launched the Griffin, the 
first sailing vessel to navigate the upper lakes. In 
September they reached their destination at Green 
Bay. From 1700 until 1756 the construction and 
navigation of sailing vessels on the lakes was 
largely confined to Lake Ontario. Then the Eng- 
lish began to build and sail vessels upon Lake Erie 
and Lake Ontario, and the commerce of Lake 
Ontario increased so fast, that in 1800 it exceeded 
that of all the other lakes together. The first Ameri- 
can vessel to sail Lake Erie was launched at Erie in 
1798. The first steam-vessel that navigated the 
Lakes was built at Sackett's Harbor in 181 7, and 
measured 240 tons. The next year the first steam- 
boat above Niagara Falls was launched at Black 
Rock, and made voyages between that place and 

Detroit. The schooner Illinois, 100 tons, was the 
first vessel to arrive at Chicago from the lower lakes. 
"This event," writes one, "occurred July 12, 1834, 
when all the male inhabitants of the village, amount- 
ing to nearly 1 00, assisted in dragging the craft across 
the bar." 

Gibson and Linn, according to Ringwalt, in 1776, 
descended the Ohio and the Mississippi from Pitts- 
burg to New Orleans, and brought back a cargo of 
136 kegs of gunpowder for the use of the continental 
army. When they reached the falls of the Ohio River 
they were obliged to unload their boats and carrj' 
the cargo around the falls ; but the success of their 
trip gave an impetus to the flatboat trade which has 
continued in one form or another up to the present 
time. The first regular packet line between Pittsburg 
and Cincinnati was estabhshed in 1794, and con- 
sisted of four keel-boats of twenty tons each. They 
were much like the modem canal-boats, and could be 
either propelled by sails, pushed by poles, or towed 
by horses. Freight charges were high, the following 
rates for steamboats on the Mississippi having been 
established by the legislature of Louisiana in 181 2 : 
From New Orleans to Louisville, four and one half 
cents per pound for heavy goods, and six cents for 
light, averaging five cents per pound, or per ton 
$112; from New Orleans to Natchez, three quarters 
of a cent per pound, or $1.50 per barrel; and the 
same rate for all intermediate landings from New 
Orleans to Louisville. Passage, $125 for the full 
trip, and $30 to Natchez. Half-rates were allowed 
for tonnage going down the river. 

Hon. Levi Woodbury, who made a trip down the 
Mississippi in 1833, says : " At every village we find 
from ten to twenty flat-bottom boats, which, besides 
com on the ear, pork, bacon, flour, whisky, cattle 
and fowls, have a great assortment of notions from 
Cincinnati and elsewhere. Among these are com 
brooms, cabinet furniture, cider, apples, plows, cord- 
age, etc. They remain in one place until all is sold 
out, if the demand be brisk ; if not, they move farther 
down. After all is sold out they dispose of their 
boat, and return with their crews by the steamers to 
their homes." 

By 1856, however, the steam-tonnage of the Mis- 
sissippi and its tributaries equaled the steam-tonnage 
of the whole of Great Britain. Until 1850 the boats 
measured from 200 to 400 tons ; but the builders en- 
larged their vessels from year to year, until, in 1878, 
they attained the size of the transatlantic liners. The 
steam-tonnage of the inland and coast lines of the 
United States increased from 24,879 tons in 1823 
to 1,172,372 tons in 1876, as follows: 


INLAND AND COASTWISE FLEETS, 1876. est railway in the world. It was also the first rail- 

NtMBER OF Tonnage, ^ay to Carry the United States mails. In 1834 the 


Atlantic and Gulf coasts 2,081 665,879 opening of the Philadelphia and Columbia Rail- 
Pacific coast 270 78,439 road, as part of the system of internal improve- 

Northern lakes 921 201,742 r -r> 1 • 1 ^ 

Western rivers 1,048 226,312 rnents of Pennsylvania, gave that State a contmu- 

ous line of railways and canals from Philadelphia to 

^'^'° 1.172,372 Pittsburg. In 1835 the Washington branch of the 

In 1 89 1 there were on the Great Lakes 3700 Baltimore and Ohio road was opened. The com- 

steam- and sail- vessels, with a net registered tonnage pletion of the Boston and Albany road in 184 1, and 

of 1,250,000 tons. In that year they carried 63,- a connecting-link composing the line from Albany 

250,000 tons of freight, while in 1890 the ton-mile- to Buffalo in 1842, marked the opening of the first 

age carried by this fleet was 18,849,348 ton-miles, or great railway line. The real beginning of interstate 

24.7 per cent, of the ton mileage of all the railroads commerce in this country may be said to date from 

pf the United States. The tonnage of the lake this time. 

marine more than doubled during the five years The total railway mileage of the United States has 

from 1887 to 1892. On the 16,000 miles of the now reached 178,000 miles, or nearly one half the 

navigable waters of the Mississippi River and its railway mileage of the world. The total mileage 

tributaries there were afloat, in 1890, 7445 crafts of all tracks reaches 235,000 miles, representing a 

of all kinds, with a registered tonnage of 3,400,000 capital of nearly $1 1,000,000,000 — an amount equal 

tons. During the year this fleet carried 30,000,000 to one sixth of the entire wealth of the countrv, and 

tons of freight and 11,000,000 passengers. The five times greater than the entire circulating currency 

Hudson River had, in the same year, a traffic of of the United States. The annual earning capacity 

5,000,000 passengers and 15,000,000 tons of freight, of this capital is $1,200,000,000 — an amount more 

exclusive of 3,500,000 tons that passed through the than three times the entire annual revenues of the 

canals of New York by way of the Hudson River government ; and it operates lines having an annual 

to tide-water. The total for these four divisions of traffic of over 600,000,000 passengers and 745,000,- 

waterways alone was 111,750,000 tons. The Mis- 000 tons of freight. An idea of the magnitude of 

sissippi Valley rivers furnish transportation facilities this single branch, concerned with the transporta- 

for twenty-four States, embracing an area of 1,240,- tion of freight, may be conveyed when it is stated 

000 square miles. that 745,000,000 tons means that a train of cars 

The average freight rate on wheat from Chicago long enough to reach more than six times around the 

to New York in 1890 was 5.85 cents per bushel by earth would be required to transport it all at a single 

lake and canal, and 14.31 cents per bushel by rail, load. The average distance over which this freight 

the water cost being $1.94 per ton, and the rail cost was hauled by the railroads was about 125 miles. 

$4.77 per ton. The Erie Canal is only a little over Set a single team to the task, and it would take it 

300 miles long, yet Mr. Albert Fink says that it regu- something like 1,020,547 years to move the same 

lates the freight rates of all the railroads east of the amount twenty-five miles. 

Mississippi River, not only on those whose tracks run The total number of tons of freight carried by the 

parallel with the canal, but upon those which run in steamers and sailing vessels of the rivers, lakes, and 

the opposite direction. coastwise transportation routes of the United States 

The development of the railway system of the in 1890 was 182,448,402; the tonnage moved by 

United States has been without a parallel. Time the railways in the same year was more than three 

and distance have been overcome, and the products times greater. Suppose that there had been no in- 

of the farmers, the lumbermen, the miners, and the crease since 1890 in the water traffic, and add to this 

artisans now reach in successful competition the amount the freight traffic of the railways during the 

markets of the world. The railway had its incep- year 1893, namely, 745,119,482 tons; this would 

tion less than seventy years ago in the little four-mile make the total average tonnage of the railways and 

tramway constructed in the town of Quincy, Mass., waterways of the United States 927,967,884. It is 

and operated by horses. The first really important diificult to believe that the railways of the country 

railway was the Baltimore and Ohio, fourteen miles moved in 1893 more than eleven tons of freight for 

of which were opened in 1830. In the same year every man, woman, and child within the boundaries 

the South Carolina Railway was begun ; in 1833 it of the United States, 
was completed for 136 miles, and was then the long- As late as 1850 there seems to have been little 


conception of the influence which the railways were operating over 400 miles of line, and it appears 

to wield in the development of the interstate traffic that 90 corporations operate 72.90 per cent, of our 

of this great country, and of the country itself. It total railway mileage. In 1837 the superintendent 

was thought that they could not successfully compete of motive power of the Columbia and Philadelphia 

with waterways and canals, except where a speedy Railroad reported that the following charges were 

carriage was essential. The solution of the problem imposed on the railroads named : 

of cheap transportation from Pittsburg, for example, 

^ ,^, ... ., , ' , , ' FREIGHT RATES ON RAILROADS IN 1837. 

was not reached until the railroads threatened to "" 

take away all traffic from the traders ; so that Pitts- Railroad. per Ton^;h^r milk. 

burg coal can now be delivered in New Orleans for Baltimore and Ohio 4)4 

° _ Baltimore and Washmgton 4 

about $2.60 per ton, although New Orleans is 2000 Winchester and Potomac 7 

miles away by river. Cow Island, on the upper Portsmouth and Roanoke 8 

^ ■' ^ ^ . Boston and Providence 10 

Missouri, is 4300 miles from Pittsburg ; yet coal is Boston and Lowell 7 

carried to market there, a distance as great as from Mohawk and Hudson 8 

° Petersburg lo 

New York to the Baltic Sea. Not less than 20,000 

miles of inland navigable waters are accessible to These rates seem preposterous when compared 
these Pennsylvania coal traders. The aggregate with the .878 of one cent per ton per mile, which 
number of vessels engaged in this business is more was the average charge on all the railroads of the 
than 4000, and of the 13,000,000 tons of coal that United States diuing the year 1893. 
were mined in 1893 in the counties near Pittsburg The growth of lake commerce in this country is 
about 4,500,000 tons were carried to market by something marvelous. The increase of freight ship- 
water. Yet let me illustrate further the growth of ments through the St. Mary's Canal, both east and 
domestic trade in a part of our country which was west bound, was from 1,410,347 tons in 1881 to 
only lately as remote and undeveloped as the west- 8,888,759 tons in 1891, or an advance of over 530 
ernmost provinces of Brazil. This growth, due to per cent. There was an increase in the valuation 
the transition from the pony express to the trans- of this tonnage from $28,965,612.92 to $128,178,- 
continental steam-car, quickened the activities of 208.51, or an increase of over 340 per cent. During 
California and of the whole Pacific slope like the the season of 225 days in 1891 in which this canal 
inspiration of a new hfe. The assessed value of all was open there passed through it 7339 steamers 
property within California rose from $260,563,886 and 2405 sail-vessels — a total of 10,191 vessels, 
in 1869 to $584,578,036 in 1879. ^^ 1889 ship- or an average of over 45 per day during the entire 
ments were made over the lines of the Southern season. The total registered tonnage for the season 
Pacific system of 1,140,596,010 pounds from San was 8,400,680. The freight which passed through 
Francisco, and of 1,571,347,605 to San Francisco, the canal was carried an average distance of about 
The probable duration of an overland journey from 800 miles, at a cost per mile per ton of 1.35 mills, 
the Missouri River to California before the conti- The size of the vessels passing through the canal con- 
nental railways were constructed was about no days, tinues to increase. The average registered tonnage 
It took Lewis and Clarke two years and a half to per vessel in 1867 was 626.3 tons, while in 1891 it 
travel from the Mississippi to the mouth of the Co- was 962.1 tons. This freight-tonnage during the 
lumbia and back. season of 1889 amounted to 19,717,860 tons. The 
It is claimed that the practically unobstructed tonnage passing through the same canal during the 
competition which has prevailed among railways has season of 1890, including the foreign and coastwise 
been a main cause of many consolidations of rail- traffic, amounted to 21,888,472 tons, while the ton- 
way interests. On the other hand, in defense of con- nage of all vessels of the Atlantic coast engaged in 
solidation and combination, it is asserted that these foreign trade during 1890 was but little more — 22,- 
result in better and swifter service and lower rates. 497,817 tons. All the vessel-tonnage engaged in the 
Whatever the cause or causes, rates generally are foreign trade, entering and clearing at London, Eng- 
much lower than they were ten years ago. On land, during the same year was 13,480,767 tons, and 
June 30, 1894, 44 railways, each with an operated at Liverpool the same year it was 10,941,800 tons; 
mileage of over 1000 miles, out of a total of 1039 so that the vessel-tonnage passing through the De- 
operating corporations, controlled and operated 56.30 troit River in 1890 was more than 8,000,000 more 
per cent, of the total railway mileage in the United than that of London, about double that of Liver- 
States. Extend the classification to include all roads pool, and nearly equal to that of the two combined. 

Edward A. Moseley. 


Another comparison : The tonnage passing through ments of the huge cargoes of coal that are sent from 
the Sues Canal in 1 890 was 6,890,094 tons—less than ports on Lake Erie to the harbors of the upper lakes, 
one third of that passing through the Detroit River. In 1887 the average rate per ton for lake transpor- 
It should be recalled, too, that the Detroit River was tation of coal from Buffalo to Chicago was $1.05 ; 
open for navigation during the season of 1890 only in 189 1 the average rate was fifty cents per ton ; and 
228 days, while the Suez Canal was open during the from November 10, 189 1, to the close of navigation, 
entire year. Take one more comparison : The total coal was carried from Buffalo to Duluth, a distance 
tonnage, entrances and clearances, of the foreign and of 1 000 miles, for ten cents per ton. Using the 
coastwise trade of Chicago and Buffalo for the sea- common unit (cost per ton per mile) for compari- 
son of 1 890, as compared with that of the four great son, and taking the official report of the movement 
British ports, was as follows : of freight through the St. Mary's Falls Canal, the 

'^°'*®- ton-mileage rate has decreased as follows: 1887, 

Chicago 10,288,868 .„ ° 000 -11 00 •„ o 

Buffalo 9,560,590 2.3 mills; 1888, 1.5 mills; 1889, 1.5 mills; 1890, 

London 20,962,534 1.3 mills. The average revenue per ton of freight 

Glasgow .......... ...... '. 51977)860 P^^ ™^^^ °" ^^^ ^^^ railroads of the United States was 

Hull 5,061,882 given at 9.4 mills in 1890, or more than seven times 

as much as the cost of freight carriage through the 
Carrying the comparison still further, the volume gt. Mary's Falls Canal 
of this inland trade is again shown in the figures ^he regulation of inierstate commerce before the 
givmg the foreign trade of the following great com- Declaration of Independence was by Parliament, 
mercial ports : ^^^^ Under the Articles of Confederation trade was con- 
New York 12,646,555 trolled, where it was controlled at all, by the legisla- 

^^"'^"'■S 10,417,096 Qf thirteen distinct sovereignties. It soon be- 

Antwerp 8,203,999 . 

Marseilles 7» 392, 556 came evident that the several States would not unite 

gj.^^gj^ '^'H^'^l^ in any general or fixed rule to govern commerce. 

Boston 2,676,387 Discriminations naturally followed, which resulted 

San Frlnd^co i'^86'^8^ ^" confusion and discord among the different parts 

of the confederacy. Accordingly one of the reforms 

It will be seen that the commerce of the two in- demanded under the old confederacy, and intro- 

land cities, Chicago and Buffalo, consisting almost duced in the Constitutional Convention, was that 

wholly of a coastwise trade within the confines of " Congress shall have power ... to regulate com- 

the Great Lakes, compares most favorably with the merce . . . among the several States." The dis- 

tonnage movement of the great maritime cities of satisfaction among the States in respect to the inter- 

the world. change of trade, and the urgent demand for a uniform 

In 1859 the average freight rate by lake on a and general principle controlling their commerce, 
bushel of corn from Chicago to Buffalo was 15^ were clearly shown in the debates of the Constitu- 
cents; in 187 1 the rate was 7^ cents per bushel, tional Convention. The following contemporane- 
In 1857 the average rate by lake and canal on a ous opinions are of interest: 
bushel of wheat from Chicago to New York was " The want of authority in Congress, under the 
25.29 cents; in 1870 the rate for the same service confederation, to regulate commerce had produced 
was 17. 1 cents per bushel; in 1880 it was 12.27 in foreign nations, particularly Great Britain, a mo- 
cents per bushel ; and in 1890, 5.85 cents per bushel, nopolizing policy injurious to the trade of the United 
In 1870 the average rate of freight by rail on a States. . . . The same want of a general power over 
bushel of wheat from Chicago to New York was commerce led to an exercise of the power, sepa- 
33.3 cents ; in 1880 the rate was 19.9 cents ; and in rately, by the States, which not only proved abortive, 
1890, 14.31 cents. In 1867 the average rate for but engendered rival, conflicting, and angry regula- 
carrying iron ore from Escanaba to Lake Erie was tions." (Madison Papers, vol. v., p. 119.) 
$4.25 per ton; in 1870 the average rate was $2.50 "The oppression of the uncommercial States was 
per ton; in 1891 the average rate was 82 cents per guarded against by the power to regulate trade be- 
ton ; and at one time in that year it was as low as tweeri the States." (Mr. Sherman, Deb. on Fed. 
55 cents per ton. Cons., Mad. Pap., vol. v., p. 434, 1787.) 

The benefit of these great reductions in lake trans- " Mr. Carroll and Mr. L. Martin expressed their 

portation rates appears very forcibly in the move- apprehensions, and the probable apprehensions of 



their constituents, that, under the power of regulat- 
ing trade, the general legislature might favor the 
ports of particulai States, by requiring vessels des- 
tined to or from other States to enter thereat." 
{Ibid., p. 455.) 

To cover this defect, Art. I., Sec. 9, CI. 6, of the 
Constitution was enacted, to wit : " No preference 
shall be given by any regulation of commerce or rev- 
enue to the ports of one State over those of another, 
nor shall vessels bound to or from one State be 
obliged to enter, clear, or pay duties in another." 

General Washington, in a letter to a friend on the 
weakness of the confederation, and pleading for a 
stronger government, wrote: "We have abundant 
reason to be convinced that the spirit of trade 
which pervades these States is not to be repressed. 
It behooves us, then, to establish just principles, and 
this cannot, any more than other matters of national 
concern, be done by thirteen heads differently con- 
structed and organized. The necessity, therefore, 
of a controlling power is obvious, and why it should 
be withheld is beyond my comprehension." 

Alexander Hamilton, in the " Federalist," Letter 
VII., wrote : " The competition of commerce would 
be another fniitful source of contention. The States 
less favorably circumstanced would be desirous of 
escaping from the disadvantages of local situation, 
and of sharing in the advantages of their more for- 
tunate neighbors. Each State or separate confed- 
eracy would pursue a system of commercial probity 
peculiar to itself. This would occasion distinctions, 
preferences, and exclusions which would beget dis- 
content. The habits of intercourse on the basis of 
equal privileges, to which we have been accustomed 
from the earliest settlement of the country, would 
give a keener edge to those causes of discontent 
than they would naturally have, independent of the 
circumstances." Also, in Letter XXII. : " The inter- 
fering and unneighborly regulations of some States, 
contrary to the true spirit of the Union, have, in 
different instances, given just cause of umbrage and 
complaint to others ; and it is to be feared that ex- 
amples of this nature, if not restrained by a national 
control, would be multiplied and extended till they 
became not less serious sources of animosity and dis- 
cord than injurious impediments to the intercourse 
between the different parts of the confederacy." 

In the debates of the Constitutional Convention 
the clause regulating commerce, etc., was agreed to 
netn. con., not even a yea-and-nay vote being taken. 
When the grant of this power to regulate commerce 
among the States was made by the Constitution, 
the traffic which might be controlled under it was 

quite insignificant. On the land there was nothing 
that could approach the dignity of interstate com- 
merce, and its regulation, as also of that which was 
exclusively State traffic, was for the most part left to 
the rules of the common law. The exceptional regu- 
lations, if any seemed to be called for, were made 
by the State laws. For the regulation of commerce 
on the ocean and other navigable waters. Congress 
very promptly passed the necessary laws; but its 
jurisdiction within the Umits of the States was not 
very clearly understood, and it was not until the cele- 
brated case of Gibbons vs. Ogden, decided in 1824, 
that it was authoritatively and finally determined 
that the waters of a State, when they constituted a 
highway for foreign and interstate commerce, are, so 
far as concerns such commerce, as much within the 
reach of Federal legislation as are the high seas, and 
consequently that exclusive right for their navigation 
cannot be granted by States whose hmits embrace 
them. But while providing from time to time for 
the regulation of commerce by water. Congress still 
abstained from undertaking the regulation of com- 
merce by land. The reasons were the same. The 
land commerce was insignificant, and the rules of the 
common law were in general found adequate for the 
settlement of any questions. When Congress pro- 
vided for the construction of the Cumberland road, 
it was thought undesirable to regulate its use by 
national law, or to take national supervision of the 
commerce upon it ; and it was left to the supervision 
and care of the States through or into which the 
road was built. With the application of steam as a 
motive power for propelling vessels, conditions were 
immediately changed. But even then the circiun- 
stances were favorable to a prolongation of State con- 
trol. The first improved highways were turnpikes, 
the next in grade canals ; but the highways by water, 
as well as the highways by land, were provided for 
by the States. It was not unnatural that they should 
be left in charge of the regulation of trade upon 
them, especially as no complaint was made that 
their regulations were unjust, or that they discrimi- 
nated unfairly as against the citizens or the business 
of other States. When, in 1830, steam-power began 
to be applied to the propulsion of vehicles upon land, 
the same conditions continued to prevail. The power 
of the Federal government in the regulation of com- 
merce between the States was put forth negatively 
rather than affirmatively ; that is to say, it was put 
forth in restraint of excessive State power, instead 
of by way of affirmative national regulation. 

1 See First Annual Report of the Interstate Commerce 



The subject of the management of railways in re- 
spect to interstate commerce had been more or less 
discussed in Congress, when in March, 1885, a reso- 
lution was adopted by the United States Senate 
empowering a select committee, known subsequently 
as the CuUom Committee, to investigate it. On 
January 18, i886, this committee submitted a re- 
port based upon testimony contained in more than 
1450 printed pages. On page 40 the committee 
says : " Unjust discrimination is the chief cause of 
complaint against the management of railroads in the 
conduct of business, and gives rise to much of the 
pressure upon Congress for regulating legislation." 

In summing up the testimony, on pages 180-182 
the committee says: "The complaints against the 
railroad systems of the United States expressed to 
the committee are based upon the following charges : 
(i) That local rates are unreasonably high, com- 
pared with through rates. (2) That both local and 
through rates are unreasonably high at non-compet- 
ing points, either from absence of competition or in 
consequence of pooling agreements that restrict its 
operation. (3) That rates are established without 
apparent regard to the actual cost of the service per- 
formed, and are based largely upon what the traffic 
will bear, (4) That unjustifiable discriminations are 
constantly made between individuals in the rates 
charged for like service under similar circumstances. 
(5) That improper discriminations are made between 
articles of freight and branches of business of a like 
character, and between different quantities of the 
same class of freight. (6) That unreasonable dis- 
criminations are made between localities similarly 
situated. (7) That the effect of the prevailing pol- 
icy of railroad management is, by an elaborate sys- 
tem of secret special rates, rebates, drawbacks, and 
concessions, to foster monopoly, to enrich favored 
shippers, and to prevent free competition in many 
lines of trade in which the item of transportation is 
an important factor. (8) That such favoritism and 
secrecy introduce an element of uncertainty into 
legitimate business that greatly retards the develop- 
ment of our industries and commerce. (9) That the 
secret cutting of rates, and the sudden fluctuations 
that constantly take place, are demoralizing to all 
business except that of a purely speculative charac- 
ter, and frequently occasion great injustice and heavy 
losses. (10) That in the absence of national and 
uniform legislation the railroads are able, by vari- 
ous devices, to avoid their responsibility as carriers, 
especially on shipments over more than one road, 
or from one State to another, and that shippers find 
great difficulty in recovering damages for the loss of 

property or for injury thereto. (11) That railroads 
refuse to be bound by their own contracts, and arbi- 
trarily collect large sums in the shape of overcharges, 
in addition to the rates agreed upon at the time of 
shipment. (12) That railroads often refuse to recog- 
nize or be responsible for the acts of dishonest agents 
acting under their authority. (13) That the common 
law fails to afford a remedy for such grievances, and 
that in case of dispute the shipper is compelled to 
submit to the decision of the railroad manager or 
pool commissioner, or run the risk of incurring fur- 
ther losses by greater discriminations. (14) That 
the differences in the classifications in use in vari- 
ous parts of the country, and sometimes for ship- 
ment over the same road in different directions, are 
a fruitful source of misunderstandings, and are often 
made a means of extortion. (15) That a privileged 
class is created by the granting of passes, and that 
the cost of the passenger service is largely increased 
by the extent of this abuse. (16) That the capitali- 
zation and bonded indebtedness of the roads largely 
exceed the actual cost of their construction or their 
present value, and that unreasonable rates are charged 
in the efforts to pay dividends on watered stock and 
interest on bonds improperly issued. (17) That rail- 
road corporations have improperly engaged in lines 
of business entirely distinct from that of transporta- 
tion, and that undue advantages have been afforded 
to business enterprises in which railroad officials are 
interested. (18) That the management of the rail- 
road business is extravagant and wasteful, and that a 
needless tax is imposed upon the shipping and trav- 
eling public by the unnecessary expenditvire of large 
sums in the maintenance of a costly force of agents 
engaged in a reckless strife for competitive business." 

The report of Senator CuUom's Committee formed 
the basis of the law commonly known as the Inter- 
state Commerce Act, which became effective April 
3, 1887. The Supreme Court in the case of the 
Union Pacific Railway Company against Goodridge, 
October term, 1892, in speaking of a similar act of 
the State of Colorado, said : " This act was intended 
to apply to interstate traffic the same wholesome rules 
and regulations which Congress two years thereafter 
applied to commerce between the States, and to cut 
up by the roots the entire system of rebates and dis- 
criminations in favor of particular localities, special 
enterprises, or favored corporations, and to put all 
shippers on an absolute equality." 

The statute recognizes the fact that it is no proper 
business for a common carrier to foster particular 
enterprises or to build up new industries ; but, deriv- 
ing its franchise from the legislature, and depending 



upon the will of the people for its very existence, it 
is bound to deal fairly with the public, to extend rea- 
sonable facilities for the transportation of persons and 
property, and to put all its patrons upon an absolute 
equality. The laws making the giving of transpor- 
tation privileges a criminal offense are at present 
difficult of enforcement. Public opinion has not 
yet been roused to the energetic condemnation 
which is necessary to make these special favors as 
completely unknown as they are at the post-office 
window, where the value of every stamp must be 

At the head of all the vast machinery employed 
in moving interstate commerce are men of integrity, 
and of abihty rarely developed in other walks of life, 
broad-gauged men, to whom the public is indebted 
for the efficiency with which they carry on their stu- 
pendous enterprises. Under the railway presidents 
are the traffic managers, the passenger and freight 
agents. The feeling of these men that they must 
serve solely the corporations which employ them 
has grown to be a second nature with them. Their 
duty to the government and to the public, therefore, 
is sometimes obscured, and it is hard for them to 
realize that many practices which they have come 
to regard as ordinary business methods are wrong. 
So also the shipper and the merchant find it hard to 
realize that the push and barter and dicker that have 
made them successful must be abandoned when they 
ship their merchandise; that it is no longer to be 
bargained for, and cannot be carried except at a 
rate open to every competitor. 

On February 4, 1887, the Act of Congress creat- 
ing the Interstate Commerce Commission, and in- 
vesting it with authority to regulate certain matters 
with respect to commerce which were detrimental 
to the public interest, and with authority to require 
annual reports from all carriers engaged in carrying 
interstate commerce, was passed. This act, being 
in the nature of experimental legislation, has not 
accomplished all that its framers hoped or intended, 
but that great good has been accomplished cannot be 
denied. Various defects in its practical application 
have from time to time been brought to the atten- 
tion of Congress, and amendments to remedy some 
of them have been adopted. The statistics compiled 
from the reports required under the provisions of this 
act have marked a new era in railway statistics in this 
country. Being compiled from sworn reports made 
up on a uniform plan and for a uniform period, in 
compliance with a requirement of law, and published 
as official documents of the government, they are 

accepted as authority, and eagerly sought after by 
the public and by railway officers. 

I may observe in closing that within the past two 
or three years the courts have taken advanced ground 
in asserting the power of the Federal government over 
interstate commerce. It was held by the Supreme 
Court in the case of Debs that " the government of 
the United States is one having jurisdiction over 
every foot of soil within its territory, and acting 
directly upon each citizen ; that while it is a govern- 
ment of enumerated powers, it has within the limits 
of those powers all the attributes of sovereignty ; that 
to it is committed power over interstate commerce 
and the transmission of the mail; that the powers 
thus conferred upon the national government are not 
dormant, but have been assumed and put into prac- 
tical exercise by the legal action of Congress ; that in 
the exercise of those powers it is competent for the 
nation to remove all obstructions upon highways, 
natural or artificial, to the passage of interstate com- 
merce or the carrying of the mail ; that while it 
may be competent for the government (through the 
executive branch, and in the use of the entire execu- 
tive power of the nation) to forcibly remove all such 
obstructions, it is equally within its competency to 
appeal to the civil courts for an inquiry and deter- 
mination as to the existence and character of any 
alleged obstructions, and if such are found to exist, 
or threaten to occur, to invoke the powers of those 
courts to remove or restrain such obstructions." In 
this case the extent and nature of the power of the 
Federal government over interstate commerce, and 
the methods by which that power can be applied, 
were discussed. It was decided that the United 
States Circuit Court, sitting as a court of equity, 
has power to enjoin, at the instance of the Attorney- 
General of the United States, acts of obstruction to 
interstate commerce, notwithstanding that the acts 
enjoined, or some of them, might amount to offenses 
against the criminal law of the United States. 

While it is clearly the fact that, under our form 
of government, the national authority has no excuse 
for interfering with the relations existing between 
employer and employee in ordinary business transac- 
tions, it is maintained by many that as the govern- 
ment has control of the agencies engaged in interstate 
commerce, those who are employed by such agencies 
are also engaged in the public service, and for that 
reason an obUgation exists on the part of Congress to 
enact such legislation as will tend to settle differences 
which may arise between railroads and their em- 
ployees without causing inconvenience to the pubHc. 



IT is something more than a mere figure of 
speech to call the post-office the right hand 
of commerce. The rapid transmission of 
news, domestic and public, has been of enormous 
benefit to individuals and the general community, 
but to the merchant it has been paramountly one of 
the most important factors in successfully carrying 
on his commercial enterprises. We can scarcely 
conceive how a business of any consequence could 
ever have been prosecuted without the aid of this 
most important and, I am happy to say, best appre- 
ciated branch of the government service. To tell 
the story of the post-office in commerce, therefore, 
would be to recite the history of the service itself, 
from the time in England, in 1533, when the few 
posts that were established were for the exclusive 
use of the sovereign, down to the present day, when 
the letter of the poorest and most despised person 
in the British dominions or in the United States is 
treated as sacredly and handled with as much care 
as though it were written by the Queen of England 
or the President of our country. Even with the 
generous space allotted to me I can only hope to 
allude briefly to the most important episodes in the 
service, whose history is a part of the annals of 
commercial progress throughout the world. 

At the beginning of the seventeenth century there 
were only four established posts in the British do- 
minions — one to Ireland, one to Scotland, one to 
Plymouth, and one to Dover, the last-named being 
the most important and most used, because it passed 
through the county of Kent, the highroad to the 
Continent. There were no commercial relations 
between one town and another, but the foreign trade 
was considerable. Many foreigners, on account of 
being persecuted in their native countries, had been 
driven to London. It was the era of the Flemish 
merchant, who introduced the manufacture of 
woolen cloth, and so successfully that the exports 
from England to the Netherlands in the time of 

Philip II. amounted to 5,000,000 crowns annually. 
These Flemish merchants were exceptionally intel- 
ligent, and nearly all the peasants they employed 
were able to read and write. A nice little quarrel 
arose between the crown and the foreign merchants 
in London. The latter claimed the right to send 
their letters by their own agents ; the crown insisted 
that all communications should be sent through the 
regular channel. This feud had existed for many 
years. A proclamation issued in 1591 gave the 
state a monopoly of carrying letters through the 
county of Kent, a law which was applied to all the 
postal routes eighteen years later. In 1603 another 
proclamation gave to those who furnished horses for 
the post carriers the exclusive right of letting horses 
to travelers ; but the foreign merchants, against 
whom these proclamations were directed, still per- 
sisted in sending their letters by their own special 
messengers, procuring horses from other quarters. 
Another proclamation, in which magistrates were 
urged to see that horses were procured at the post- 
houses alone, had no effect. Under Lord Stanhope, 
the master of the posts (what we should call the 
postmaster-general) at that time, there was a for- 
eigner of the name of De Quester, who was superin- 
tendent of the foreign post, and who had discharged 
his duties so faithfully, sending the government des- 
patches with such promptness, that the king, in 
16 19, made him "Postmaster of England for For- 
eign Parts out of the King's Dominions." Doubt- 
less this appointment was partly intended to induce 
the foreign merchants to give up their special mes- 
sengers ; but it not only failed to produce that effect, 
but gave dire offense to Lord Stanhope, who had 
letters patent to his office which declared that he 
had charge of the internal parts of the kingdom and 
those "beyond the seas within the king's domin- 
ions." In this way, through the practice of the 
foreign merchants in employing special messengers, 
a serious quarrel was brought about between Lord 



Stanhope, De Quester, and the king, which was 
referred to the Privy Council for settlement. The 
Council finally agreed that the foreign merchants 
(who, by the way, were called " merchant adventur- 
ers ") were " to have a post of their owne choice " 
to the city of Hamburg and town of Delft, " where 
the staples of cloth are now fetched, or to have such 
other place or places whither the same shall happen 
to be removed." This action superseded De Ques- 
ter's appointment, though some few restrictions were 
imposed upon the merchants. Stanhope gained a 
lawsuit he had instituted to defend his rights, and 
Billingsley, a broker who had been carrying the for- 
eign merchants' letters, was sent to prison, but after- 
ward, on petition to the king, released. 

From the earliest days of the English post-office 
the merchants had been favored ; their bills of ex- 
change, invoices, and bills of lading, when written 
on a single sheet of paper, were exempt from post- 
age. The postmaster-general contended that the 
exemption applied only to foreign letters ; the mer- 
chants claimed that inland letters were included ; 
otherwise, they shrewdly observed, "letters might 
go cheaper to Constantinople than to Bristol." The 
result of the controversy was that the merchants 
procured an act to be passed declaring their inter- 
pretation of the law to be correct. 

When Sir Rowland Hill, the father of penny 
postage, was making his brave fight for postal reform, 
he was glad to have the aid of a committee of 
London merchants to collect evidence in favor of 
his plans. The chairman of this committee was 
Mr. Bates, of the house of Baring Brothers ; and 
other members equally prominent were obtained 
without difficulty. When the act in favor of penny 
postage had passed the House of Commons the 
measure had to come before the House of Lords. 
The ultraconservative element were in the habit of 
saying in those days, " Thank God, there 's a House 
of Lords! " One of the members of the Mercantile 
Committee, with an enterprise that would be com- 
mendable in a nineteenth-century journalist, sought 
to " interview " the Duke of Marlborough, who was 
a member of the Upper House, thinking, very 
properly, that if some expression from him in favor 
of the measure could be obtained before it came up 
for consideration in the House of Lords, it would 
be of immense advantage to the postal reformers. 
But " interviewing " was not in vogue in that day, 
and the noble lords were unapproachable, especially 
to persons who had " views " about reforming any 
branch of the English government. The merchant, 
representing the committee, wrote to the duke that 

they would like to see him and present their reasons 
for demanding reform in postal matters, and a re- 
duction of the rate to a penny. The duke's reply, 
through his secretary, was that "he is not in the 
habit of discussing pubhc affairs in private, and he 
dechnes to receive the visits of deputations or indi- 
viduals for the purpose of such discussions." Row- 
land Hill then wrote a letter to his Grace, giving his 
reasons for the establishment of a uniform penny 
postage. The duke never answered the letter, but 
when the debate came up in the House of Lords he 
supported the measure. The merchant of to-day 
will smile, as I suppose the merchants of that day 
were amused, at the objection of one noble lord to 
Rowland Hill's scheme. He argued that, under the 
low rate of postage, the amount of correspondence 
would be so greatly increased that " the whole area 
on which the post-office stands would not be large 
enough to receive the clerks and the letters." The 
mind of many an English official or statesman be- 
comes peculiarly dense when he comes face to face 
with some reformatory measure that is going to 
make things easier and more convenient for his gov- 
ernment or the English people. Rowland Hill mildly 
observed that his lordship should have no hesitation 
in deciding " whether, in this great and commercial 
country, the size of the post-office is to be regulated 
by the amount of correspondence, or the amount 
of correspondence by the size of the post-office." 

In the early history of the post-office in America 
it is singular that our colonies were considered sec- 
ond in importance to one of the West Indian Islands. 
By an order of the Enghsh government in 1688, 
after prescribing the rates of postage to be charged 
between the mother country and Jamaica, the order 
reads: "And his Majesty is also pleased to order 
that letter-offices be settled in such other of his 
Majesty's plantations in America as shall be found 
convenient for the service and the ease and benefit 
of his subjects." Four years later, in 1692, Thomas 
Neale obtained a grant from the crown authorizing 
him to " set up posts in North America." Neale 
never left England, but appointed Andrew Hamilton 
his representative in this country. By 1698 a 
weekly post, running over 700 miles of road, had 
been established between New York and Boston, 
and from New York to New Castle in Pennsylvania. 
The postage on a letter between New York and 
Boston was a shilling. ;!^2o a year was paid " to 
Mr. Sharpus, that keeps the letter-office at New 
York," who earned ^^170 in addition for carrying 
the mail half-way to Boston, and the mail from 
New York to Philadelphia. A salary of ^10 was 



" allowed to him that keeps the letter-office at Phil- 
adelphia," and an allowance of ;^ioo to the deputy- 
postmaster of Virginia and Maryland. 

The receipts from the service increased each year. 
In 1693 the receipts of the New York office were 
^61; in 1695, £d>2; in 1696, £g2,; in 1697, 
^122. The "Boston, Road Island, Connecticut, 
and Piscataway posts " produced from £1^^ the 
first two years tO;i^298 in the fourth. The post to 
Philadelphia kept improving, but the Virginia and 
Maryland routes never yielded anything ; in fact, 
were run at a loss of ^600, the correspondence not 
exceeding 100 letters a year. The whole system did 
not pay expenses, and in 1697 Neale was ;^236o 
out of pocket. The great question was then, as it 
has been even in later years, " How can the postal 
service be made self-supporting? " Hamilton pro- 
posed that the rates should be raised, that the post 
carriers should go "ferry free," and that ship-cap- 
tains (after a regular postal rate had been settled 
between England and America) on both sides of the 
Atlantic should be required to take the mail they 
had, at once, to the post-office of the port at which 
they first touched. Under the new rate, the charge, 
where the distance was not more than eighty miles 
from New York, was sixpence ; to and from Boston, 
twelvepence ; to and from Boston and Annapolis, 
Md., thirty-six pence ; " to and from New York and 
James Towne, 380 miles, and many broad and 
dangerous bays and rivers to be ferryed over," thirty 
pence. The Enghsh government, according to its 
own home officials, had not supported the postal 
service in the colonies as it should have done, the 
extent of its interest showing itself in an annual 
appropriation of ^50, in consideration of which the 
government letters were to be carried free. Its 
own postmasters-general, about this period, admitted 
that the posts in private hands could not prosper for 
want of due encouragement, and they recommended 
that the service should be carried on by the govern- 
ment. Neale's offer to sell his patent for ;^5ooo, 
or ^1000 a year for life, or for the imexpired term 
of the grant (about sixteen years), was not accepted 
by the government. He died in debt, his interest 
in the posts having been transferred to Hamilton, 
who died in 1703, when his widow took charge of 
the business for three or four years, and in 1707 the 
posts became vested in the crown. In 1722 the 
posts began to be self-supporting. In August of 
that year the postmaster-general wrote : " We have 
now put the post-office in North America and the 
West Indies upon such a foot that for the future, if 
it produce no profit to the revenue, it will no longer 

be a charge to it ; but we have good reason to hope 
there will be some return rather from thence." 

In these early days, when there was a monthly 
service between Boston and New York, the post- 
office in the metropolis was a locked box that stood 
in the office of the secretary of the colony. It took 
four weeks, in those times, to accumulate a post- 
rider's mail, even with the "small portable goods" 
that were allowed to be carried in that way. Later 
on, in 1775, after the time of Benjamin Franklin, 
the first postal reformer, who established the penny 
post, made newspapers pay, quickened the pace of 
the riders, advertised letters, etc., the New York 
post-office was located in a printing-house in Water 
Street, Ebenezer Hazard, a bookseller, was the 
postmaster, and William Goddard, an enterprising 
journalist and printer of New York (born in New 
London, Conn.), had charge of the route to Phila- 
delphia, Mr. Hazard managing the route to Boston, 
This latter route will be remembered for notable 
exploits in the way of post riding, including the ride 
of Paul Revere, who in 1773 rode from Boston to 
New York, and thence to Philadelphia, with the 
news of the " Boston tea-party " ; that of Ebenezer 
Hurd, who was in the service forty-eight years, 
traveling over as much space as twelve and one half 
times around the world, or as far as the moon and 
half-way back ; and the most famous ride of Paul 
Revere in 1775, when he proclaimed the intended 
movement of the British army to Lexington and 
aroused the people to arms. 

The development of the ocean postal service 
presents interesting phases. In the days of New 
Amsterdam the whole colony looked upon the 
arrival of a ship as the most important event of the 
day. It was of special interest to the merchants, 
whose correspondence was first delivered to them, 
after which the letters for the general public were 
distributed, the crowd always being down at the 
dock waiting to receive their mail. The masters of 
ships saiHng to and from America in those days un- 
consciously instituted what the well-known reformer, 
Mr. J. Henniker Heaton, of England, is striving to 
bring about in the present day — ocean penny post- 
age ; that is to say, correspondents would drop let- 
ters in a coffee-bag hung up in one of the coffee- 
houses that were so common then on both sides of 
the water, and the masters of the vessels would call 
for the mail just before sailing, and deliver the let- 
ters at the port of destination, charging one penny 
for a single letter and twopence for a double one. 

When Thomas Neale (already mentioned in this 
article) failed to make the inland post pay in the 



colonies, he proposed to establish sea rates of post- 
age. Letters would then be in charge of the post- 
office, and the shipmaster, as its agent, would hand 
them over to a postal official on arriving in port. 
Correspondence, it was argued, that was being 
delivered by private hand, under the new system 
would have to pass through the posts and pay regu- 
lar rates, which should be sixpence for a single let- 
ter, one shilling for a double letter, and one shilling 
sixpence for a packet. The English postal author- 
ities of that day were wiser than those of the time 
of Rowland Hill, for they answered that the way to 
increase the revenue of the post-office was to " make 
the intercoiu-se of letters easy to people." Rowland 
Hill, one hundred and fifty-nine years later, had to 
struggle long and hard to convince the post-office 
department of the truth of this proposition, while 
the postmasters-general in the time of Neale wrote : 
" The easy and cheap corresponding doth encourage 
people to write letters," and declared that the postal 
revenue had been increased when the rate, before this 
time, had been reduced from sixpence to threepence. 

The system of the coffee-house delivery of letters 
was used by the residents of " Breucklyn, Pavonia, 
and Hackensack," who left their mail at some well- 
known tavern previously agreed upon. This custom 
was followed until after the English took possession 
of New York. The best-known coffee-houses in New 
York were the Exchange Coffee- House, located at 
the foot of Broad Street, and the Merchants', located 
on the southeast corner of Wall and Water streets. 

After the War of 1 8 1 2 the mails were carried by 
the packet service, which had been rapidly devel- 
oped, owing to the increased trade between America 
and Europe. Frequent trips were made, and the 
facilities for foreign correspondence were much bet- 
ter than they had been. Then, from 1840 to 1855, 
came the era of the clipper-ships, which were built 
with special reference to speed, and whose services 
were quickly utilized by the American newspapers, 
the best representatives of our national spirit of 
enterprise. One of these clipper-ships, in 1846 (the 
Toronto, of the Morgan Line), beat the Cunard 
steamer from Liverpool, bringing a copy of the 
London " Times," containing European intelligence, 
forty-two days later than the last paper received. 
The New York " Herald " secured this prize, and 
published an " extra " about it the same afternoon. 

In 1845 Congress authorized the postmaster- 
general to make contracts for the transportation of 
the foreign mails, which had now become an impor- 
tant feature of the postal service. After the ocean 
mail service had become fairly started it was im- 

proved rapidly. Various suggestions have been 
made from time to time as to granting subsidies for 
this service. My own opinion is that the ships 
should receive proper compensation for carrying the 
mails, on the same plan that we pay the railroads, 
or should do the work under contract for specified 
distances. The amount of foreign mail carried has 
increased enormously. In 1840, when the Great 
Western brought it over, the British mail amounted 
to two sacks ; at the present time it amounts to five 
or six truck-loads. Over 100,000 letters are now 
despatched from New York every sailing-day, and 
nearly the same number are received. The next 
great step in perfecting this branch of the service 
will be universal international penny postage. To 
bring about this change, Mr. J. Henniker Heaton, 
M.P. from Canterbury, has been and is working 
with the same intelligence and persistency that 
characterized Rowland Hill ; and eventually, I hope 
and believe, he will meet with the same success. 

The growth of the railway mail service is another 
most important feature in the history of the postal 
service. The railroad was first used as a post-office 
in England in 1837, between Liverpool and Bir- 
mingham. On the completion of the railroad line 
the following year what was called the " flying mail " 
train was started from the British metropolis to 
Birmingham. In 1834 the mails were being con- 
veyed in the United States over seventy-eight miles 
of railroad, being carried in closed bags. In i860 
Postmaster-General Holt arranged to run a mail- 
train between New York and Boston, via Hartford 
and Springfield, with the idea of forwarding East 
the Southern mail more promptly, instead of allow- 
ing it, as the practice had been, to remain over a 
day in New York. The following year a railroad 
mail was established between New York and Wash- 
ington. In 1863 it was suggested that "post-office 
cars " could be placed on the principal railroad 
lines, and that clerks could sort the mail for the 
terminal points and intervening stations while the 
cars were in transit. A test of this system was 
made in 1864, under the direction of the postmaster- 
general, by Colonel George B. Armstrong, at that 
time assistant postmaster at Chicago. The test was 
made between Chicago and Clinton, la., August 
28, 1864. There were then no pigeonhole cases for 
letters, nor such conveniences for handling the mails 
as now exist. Under the system then in vogue they 
were not necessary ; for postmasters were required 
to post-bill all letters, paid and unpaid, wrap them 
in paper, those for each post-office in the State being 
done up separately, and write the name of the post- 

Thomas L. James. 



office of destination on the package. Those for 
other States were massed together, wrapped up, and 
addressed to the nearest distributing post-office. 

In 1864 a successful experiment of the same kind 
was made on the route between New York and 
Washington, expert clerks from the principal East- 
ern cities being selected for the work, which, it may 
be said, has been always exceptionally well done. 
Even as far back as 1863 a convention of special 
agents reported of the employees : " The amount of 
labor they perform and the degree of intelhgence 
exhibited can hardly be estimated outside the 

In 1865, in quick succession, postal cars were 
placed on the lines between Chicago and Daven- 
port, la., Chicago and Dunleith, 111. ; and the 
Chicago- Burlington and Galesbmrg-Quincy lines 
were established. The first railway postal service 
was put on the Philadelphia- Pittsburg route, on all 
the principal railroad lines leading out of Chicago, 
and on the Hudson River and New York Central 
railroads, between New York, Albany, and Buffalo. 
The new system made more rapid progress in the 
West than in the East, the New York and Washing- 
ton and the New York and Albany-Buffalo being for 
a long time the only postal-car routes. But the suc- 
cess of the service in the West led to its extension 
not only in the Eastern States, but over the whole 
country, so that by 1872 there were railway post- 
offices on fifty-seven lines of road. 

Another improvement that marks the progress of 
the postal service was the change in the rate of post- 
age in 185 1. Before that year the rate was five 
cents per half-ounce for a distance not exceeding 300 
miles, and ten cents exceeding that distance. In the 
year mentioned the rate was changed to three cents 
per half-ounce for a distance not exceeding 3000 
miles, and ten cents exceeding that distance. The 
use of adhesive stamps was authorized in 1847 and 
made compulsory in 1856. In 1863 the distance 
limit for carrying a letter was removed. In the 
same year the free-delivery or carrier system was 
established in 49 cities. In 1895 the carrier service 
is in use in 610 cities. There are about 12,000 
carriers employed, at an annual cost of about $11,- 
323,000. There are twice the number of carriers 
now employed in Chicago than were in the service 
throughout the entire country in 1864. 

In 1854 the registry system was established, which 
is certainly one of the greatest conveniences the 
commercial world possesses. It took five years to 

improve it and bring it into general use. The 
safety of the system is illustrated by the fact that 
the losses by fire, accident, and theft amount to but 
one in every 16,306 pieces. About 15,000,000 
pieces of all classes of matter are registered in a 
year. In 1864 the money-order system was estab- 
lished. Within the first six months 4 1 9 offices were 
made money-order offices ; now there are nearly 
20,000 such offices. 

Business men, more especially publishers, will re- 
call the law of 1875 which enabled them to mail 
newspapers and periodicals at the rate of two cents 
per pound. Ten years later this law was amended 
so as to make the rate one cent per pound. In 
making this change the government showed that it 
recognized the newspaper and the periodical as 
educators. Although this wise provision has been 
abused to such an extent as to make it largely 
responsible for the postal deficiency, it is safe to say 
that the law can be so amended in the future as to 
stop the abuses complained of, and at the same time 
preserve the undoubted advantages which, by its 
operation, are conferred upon the people. 

In the extent of its work and the manner in which 
the service is performed it is safe to say that the 
postal department in this country cannot be excelled 
by any other in the world. A late Enghsh writer 
(Mr. Herbert Joyce, of the London post-office) has 
this to say : " American progress has long been the 
wonder of the world, and in nothing, perhaps, has 
it displayed itself more remarkably than in the mat- 
ter of the posts. The figures which the United 
States post-office presents to us year after year — fig- 
ures as compared with which even those of the post- 
office of Great Britain fall into insignificance — make 
it difficult to believe that only two hundred years 
ago an enterprising Englishman [Thomas Neale] 
was struggling to erect a post between New York 
and Boston." 

The United States spends more money on its 
postal service than any other nation, the expendi- 
tures in 1874 amounting to $84,000,000, while 
Germany, the next in postal rank, expended less 
than $64,000,000, and Great Britain less than $37,- 
000,000. The United States is ahead of the other 
countries in annual transportation on railroads and 
other roads, the miles of service in 1894 being 264,- 
717,595; and in Germany, next in rank, 112,480,- 
758. Our postal service gives employment to 
about 180,000 persons ; that of Germany to 155,000 ; 
and that of Great Britain to 131,000. 



EASTWARD for 3000 miles of the group of 
fifteen States along the fringe of the sea 
from Massachusetts to Georgia, which Jay's 
treaty gave a recognized place among the mari- 
time and commercial powers of the world, stretched 
the barren Atlantic; for 3000 miles to the west 
stretched forest, plain, prairie, mountain, and lake, 
storing a wealth the extent of which no man of 
that time, even in the most extravagant burst of en- 
thusiastic prophecy, was to conjecture, and the de- 
velopment of which has been the marvel of man's 
industrial progress. If our merchant marine has 
lagged far behind our other national industries; if, 
for the time, it has been outstripped by competitors, 
while American manufacture and agriculture have 
pushed themselves into the front rank, it must be 
borne in mind that illimitable natural resources, 
roughly to be gauged by the creation into new States 
of over 2,000,000 square miles of territory, and by 
an increase of upward of 60,000,000 in population 
during the century, have stood behind the latter. 
The American merchant marine, on the other hand, 
in the unrestricted rivalry of nations, — which, from 
the nature of the element, must obtain upon the high 
seas, — for forty years has been hampered by the re- 
tarded use of modern materials of construction, and 
by restrictions forbidding it to enter that rivalry on 
even terms with competing nations, which have 
sought out and applied every device to promote 
their own navigation. 

The record of the American merchant marine 
from 1795 to the present day may be divided into 
two periods. The first, covering two thirds of the 
century after the promulgation of Jay's treaty, was 
a period of growth, culminating in the possession of 
the largest tonnage which up to that time had ever 
borne the flag of any nation but one, and in the 
attainment by the United States of a rank on the 
ocean second only to that of Great Britain and all 
her colonies combined, with the promise that before 


many years our sea power would be unsurpassed. 
At the end of the second period the total tonnage 
of our great rival surpasses ours three to one, and 
on the ocean nine to one. We hold by uncertain 
tenure third rank as a mercantile power on the sea ; 
and of the hundreds of steamships under every flag 
crossing the Atlantic and the Pacific from our shores 
to the Old World, only fifteen fly the Stars and Stripes. 
The dividing-line in time between these strongly 
contrasting periods was vaguely within the decade 
from 1855 to 1865. The forces which during this 
interval turned our maritime progress into retrogres- 
sion, in the order of their ultimate importance, were 
the substitution of iron for wood as the chief mate- 
rial of marine construction, the diversion of the 
nation's energies from the sea to internal develop- 
ment, and the losses inflicted upon our mercantile 
marine by the Civil War. Even these causes would 
not have sufficed to produce such destructive results 
had not the inadequacy of our laws, compared with 
the laws of rival nations, intensified their operations. 
Wherein lies that inadequacy and how it may be 
remedied are questions which unfortunately are mat- 
ters of partizan dispute. They cannot, accordingly, 
be discussed within the limitations necessarily placed 
upon this volume. 

On December 31, 1789, the merchant fleet of the 
United States amounted to 201,562 tons, of which 
123,893 tons were registered for the foreign trade, 
68,607 to"s enrolled for the coasting trade, and the 
remainder engaged in the fisheries. In May, 1789, 
James Madison, in the House of Representatives, 
stated that the tonnage entered in Massachusetts, 
New York, Pennsylvania, Maryland, Virginia, South 
Carolina, and Georgia amounted to 437,641 tons 
(including repeated voyages), of which only 160,907 
tons were foreign. " This circumstance," said Mr. 
Madison, "annexed to our capacity of increasing 
the quantity of our tonnage, gives us a favorable 
presage of our future independence." By 1795 the 



tonnage of our merchant fleet had increased to 747,- 
965 tons, and in 1820, in spite of the oppressive 
influence of the Embargo acts, to 1,280,167 tons, 
583,657 tons of which were in foreign trade, com- 
pared with a tonnage for the entire British empire 
of 2,648,593 tons. Three years later the American 
tonnage (counting repeated voyages) entering the 
United States from foreign ports amounted to 8 1 o,- 
761 tons, compared with 119,487 foreign, of which 
89,553 tons were British. 

At the outset the efforts of the United States to 
engage in the carrying trade were met by discrimi- 
nating duties imposed by our older rivals on Ameri- 
can vessels. Sharp retaliation, begun by the first 
Congress and consistently followed up, forced nation 
after nation to withdraw from this mode of warfare 
upon our commercial life, and led to a series of 
treaties of friendship, navigation, and commerce, 
which are the basis of our trade relations with the 
world. By these treaties, associated with illustrious 
presidents, and negotiated, as secretaries of state and 
ministers, by Albert Gallatin, John Quincy Adams, 
Henry Clay, Martin Van Buren, Daniel Webster, 
James Buchanan, Hamilton Fish, Thomas F. Bay- 
ard, and others, the United States obtained for their 
vessels in the ports of nearly every civilized nation 
equal treatment with that accorded to the vessels of 
the nation itself, and in return granted to foreign 
vessels in our ports the same treatment which we 
accord to American vessels. The negotiation of 
these treaties is doubtless the most splendid achieve- 
ment of American diplomacy ; it is surely one of the 
greatest boons ever conferred upon the mercantile 
marine of the world. The destructive effects of 
discriminating and retaliatory taxation of shipping 
upon all who resort to it had been forced home 
upon our early statesmen by the experience of the 
colonies and of the Confederation ; and in freeing 
for all time American shipping, and with it the ship- 
ping of the world, from such warfare, they gave to 
navigation and to the international trade by which it 
lives an impetus equal in its way to that given by 
the substitution of steam for sail. 

Enlisting a people predisposed to the sea, within 
easy reach of boundless forests permitting the build- 
ing of vessels more economically than was possible 
in England, which was already compelled to import 
much of its ship -timber, and freed by diplomacy 
from foreign restrictions, the American merchant 
marine in i860 had reached the impressive total of 
5,353,868 tons, of which 2,379,396 tons were regis- 
tered for foreign trade. The total tonnage of the 
United Kingdom was but 4,586,742 tons, and of 

the entire British empire, 5,710,968 tons, while the 
combined tonnage of France, the component parts 
of the present German empire, and Norway was less 
than the tonnage we were employing in foreign trade 
alone. The tonnage (including repeated voyages) 
of American vessels entering the United States from 
foreign ports during that year was 5,921,285, and of 
foreign vessels, 2,353,911 tons. The tonnage of 
American vessels entering and clearing at the ports 
of Great Britain and Ireland was 2,981,697 tons, 
against 3,227,591 tons German and French com- 

In 1850 the new tonnage built by the United 
States amounted to 272,218 tons, while that built 
by Great Britain amounted to only 133,695 tons. 
In i860 our new tonnage was 214,798, and that of 
our foremost rival, 301,535 tons. Our relative 
positions had changed during the decade before the 
war. In 1855, the year of our greatest construction, 
the United States built 2027 vessels, of an aggregate 
tonnage of 583,450, of which 381 were full-rigged 
ships. By a steady and rapid decline, without equal 
in our marine history, the product of oru" yards in 
four years fell to 875 vessels, of 156,602 tons, in 
1859, of which but 89 were full-rigged ships, ris- 
ing in i860, but only to 214,798 tons. The decline 
is not to be attributed to the substitution of steam 
for sail, for, as the home of Robert Fulton, this 
country in the early years of steam-navigation easily 
took and held the first rank. In i860 our steam 
fleet aggregated 867,937 tons, of which 97,296 tons 
were registered, against a total steam tonnage of 
only 500,144 for the entire British empire. But 
the change from wood — the material of marine con- 
struction in which our new country abounded — to 
iron, in the cheap production of which Great Britain 
excelled, completely altered the conditions of ship- 
building, and thus changed the conditions of our 
own and competing merchant marines. The reasons 
for this change of material, as well as the changes in 
models which it necessitated, may be more appro- 
priately considered under American Ship Building. 
Only the fact and its relation to our merchant marine 
are within the scope of this article. The fact be- 
came important because our laws restricted the 
American merchant marine to home-built ships. 
We stood by the principle that the privileges of the 
flag and of national register should be bestowed 
only on home-built ships. Great Britain and other 
nations had already abandoned that principle, or 
soon after gave it up. Her foreign and colonial 
relations, too, had impressed upon England the im- 
portance of established lines of steam-communica- 



tion by sea, and forced upon her the policy of liberal 
assistance in the establishment and maintenance of 
such Unes. Without insular or remote dependencies, 
and freed from foreign complications, the United 
States lacked the motive which made popular in 
Great Britain the policy of steamship subsidies ; and 
we took it up and abandoned it intermittently, thus 
estabhshing an uncertainty in legislation which in 
business affairs is often industrially more harmful 
even than a wrong policy consistently ptu"sued. 
The policies of admitting foreign-built vessels to 
the national register, — or " free ships," as it is popu- 
larly designated, — and of subsidies to shipping, may 
not be considered, under the restrictions placed 
on this article; but without transgressing proper 
bounds, it may be said that the two are not con- 
flicting nor alternative policies, but independent 
methods of dealing with different subjects. The 
former aims to encourage navigation under the 
national flag; the latter to promote domestic ship 
building. All other nations have adopted one or 
both of these policies. Our own country has adopted 
and consistently followed neither. Our merchant 
marine, in consequence, has naturally yielded place 
on the seas to rival nations which hastened to adopt, 
and have steadily supported, legislation adjusted to 
the changed conditions of construction wrought by 
the substitution of steel for wood as the chief mate- 
rial of ship building. 

Eastward for 3000 miles from our shores stretched 
the Atlantic, barren, but famihar in its dangers and 
rewards, and as naturally the home of the ambitious 
American as of the ambitious English boy, as natu- 
rally the place for the investment of American as of 
British capital. For more than half a century it had 
been the scene of many of our enterprises. The 
discovery of gold in California in 1 849 ; the begin- 
ning of our railroad system, which doubled in the 
decade from 1855 to 1865 ; the discovery of petro- 
leum, carrying confusion to our whaling-fleets, — to 
name but a few of many causes, — at this time turned 
westward from the sea our enterprise and capital. 
The certainty of reward for labor and capital, and 
the amount to be hoped for, were greater there than 
the Atlantic or China trade could offer ; and from a 
maritime power, pressing close upon Great Britain, 
the United States became a railroad power of the 
first magnitude. Other articles of this centennial 
volume, testifying to our wonderful inland growth, 
bear silent witness to one cause of the decHne of 
which this article is required to speak. 

From 1 86 1 to 1865, the period of the Civil War, 
the American tonnage registered for the foreign 

trade fell from 2,540,020 tons to 1,504,575 tons; 
and within the four years immediately following the 
blockade of Southern ports by the Union fleets and 
the fitting out of Confederate privateers to destroy 
Northern merchantmen, 874,652 tons of American 
shipping were transferred to foreign flags. In Sep- 
tember and October, 1862, the Alabama burned 
eighteen American merchantmen ; and the damage 
then done to American vessels and cargoes by pri- 
vateers fitted out in British ports was later com- 
promised by the payment of $15,000,000 to us by 
Great Britain. In 1865 the tonnage (including re- 
peated voyages) of American vessels entering the 
United States from foreign ports had decreased to 
2,943,661 tons, while the foreign tonnage had in- 
creased to 3,216,967 tons. The war thus tremen- 
dously accelerated a decline of American shipping 
which from other causes was already inevitable. 

The carrying power of the world's sea-going mer- 
chant marine in 1875 was 28,407,946 tons; in 1895 
it is 49,526,847 tons. The relative rank of the five 
principal sea powers at the beginning and end of 
this period follows : 

MARITIME POWERS, 1875 to 1895. 

1895. 1875. 








French ... 

All others 



49,526,847 28407,946 

During the last twenty years the United States 
and Germany have changed their relative ranks, 
and this year only seven per cent, of the world's 
sea-going tonnage is under the American flag, as 
compared with fifteen per cent, twenty years ago. 
The United States and Italy alone of the ten prin- 
cipal maritime nations show a decline in over-sea 
carrying power since 1875. 

During the fiscal year 1 894 the tonnage of Ameri- 
can vessels (counting repeated voyages) entering the 
United States from foreign ports was 4,654,679 tons, 
while the foreign tonnage was 15,334,984 tons. 
The American tonnage entering from Europe was 
341,876 tons; the foreign, 9,326,235 tons. Trans- 
atlantic voyages from the United States to Europe 
and Africa numbered 187 under the American flag, 
compared with 5626 under foreign flags; of trans- 
pacific voyages to Asia, AustraHa, and Oceanica, 311 
were under the American and 351 under foreign 

Eugene T. Chamberlain. 



flags. Our shipping in foreign trade is now almost 
wholly engaged in voyages on the Lakes and north- 
ern borders to the British possessions, and to Central 
America, the Caribbean coast of South America, 
and the West Indies. The statistics given, and con- 
clusions to be drawn from them, should be modified 
by one consideration, which, though not a matter 
of official record, is a well-understood business fact. 
Within the last fifteen years American capital has 
purchased abroad a considerable number of steam- 
ships, and American enterprise is operating them in 
transatlantic trade. Though barred by the law from 
the use of the flag, these vessels are the evidence of 
an awakened maritime spirit, promising the attain- 
ment of higher maritime rank by the nation. This 
awakened spirit has already secured the admission 
of the Paris and New York and the construction of 
the St. Louis and St. Paid, giving to the country a 
line of four steamships unsurpassed in the world. 
The United States, in consequence, for the first time 
in many years, have entered into competition for 
the express, passenger, and mail traffic of the north 
Atlantic. In one instance we have thus adopted 
the policy — free ships and liberal compensation to 
home-built ships for public services — by which our 
rivals on the sea have made themselves formidable. 
If that instance is sporadic, its full results are already 
in sight. But if it is the beginning of a new policy, 
approved by the experience of nations, we are enter- 
ing our second mercantile century with the promise 
of a restored merchant marine. 

More than fifty years must pass fcefore the history 
of the first century of our merchant marine on the 
Pacific coast can be written. Beginning in 1849 at 
San Francisco with 722 tons sail, our Pacific fleet 
doubled its tonnage during the war period, and now 
numbers 1520 vessels, of 456,359 tons. San Fran- 
cisco stands alone among our chief seaports as enter- 
ing and clearing in foreign trade a larger tonnage of 
American than of foreign vessels ; and with the open- 
ing of new Asiatic markets and the need of steadily 
increasing tonnage our geographical position des- 
tines us to be the sea power of the Pacific. The 
century's record of American shipping on the At- 
lantic coast has been a story of national pride, tem- 
pered with national regret and mortification ; the 
record of our shipping on the Pacific is one of brief 
achievement and good promise. Splendid perform- 
ance and bright augury, not only for the particular 
section itself, but for our national future as a mari- 
time power, fill every year of the record of our mer- 

chant fleets on the Great Lakes. Two years after 
Jay's treaty the first small merchant vessel was built 
on the lakes west of Niagara, and when the first 
half-century was ended the tonnage of our lake 
ports was only 89,000 tons. On June 30, 1895, our 
lake fleets comprised 3342 vessels, of 1,241,459 tons, 
half in numbers and two thirds in tonnage being 
steam-vessels. This fleet in carrying power may be 
estimated at 2,666,261 tons. These figures mean 
that we have created on our inland seas a mercan- 
tile naval power excelled only by the strength of 
Great Britain or Germany on the high seas, greater 
than France or Norway, or than any other two 
maritime powers combined. Natural bonds, easily 
broken, fetter from free employment on the ocean 
our reserve powers as a ship-building and ship-own- 
ing nation, now confined to the Great Lakes. So 
eager to pass these barriers have these powers been 
that the lake interests have built steamships for the 
Pacific trade, cut them in two in order to pass the 
locks and canals which separated them from the 
Atlantic, and then put them together for the voyage 
round the Horn. Of our 669 steamships of over 
1000 tons, 359 are shut within the lakes. Our 
production of iron and steel draws close upon, and 
in several years has surpassed, that of Great Brit- 
ain. Freed by a ship-canal to the Atlantic, our 
lake ship-building interests — having close at their 
doors the center of production of sixty per cent, of 
our iron output — can compete on the high seas, 
and who could then doubt that interests which in 
confinement have outstripped the nations of the 
world, except two, will help to restore to the United 
States again the rank it held as close second to the 
entire British empire only thirty-five years ago ? 
Join the union of the Great Lakes to the Atlantic 
with a removal of the narrow Central American 
barrier which separates the Atlantic and Pacific, 
and, as steel in time becomes cheaper here than 
anywhere in the world, may we not look even to 
surpass in the first half of our second century the 
rank we attained in the first half of our first century, 
and take to ourselves the rule of the wave? 

Eastward of the forty-four States of the Union for 
3000 miles, westward for 5000, stretch the oceans 
as we begin our second century of commercial in- 
dependence, a nation richer in performance and 
promise than any other the world knows. Geog- 
raphy, natural resources, and our benign poHcy of 
neutrality point to an ultimate destiny for this country 
as the world's great ocean carrier of the future. 

/ ♦ 

LMjfuu. // 

/(/C£yL. '\£2-ulax^L<,^C<^aAJ^~-' 



NOT since the history of the world began has 
there been such a marvelous advancement 
of all factors creating wealth and developing 
trade and commerce as during the past century ; nor 
in any other section has the result been so phenomenal 
as that attained in the United States. In 1795 this 
country had acquired but a fraction of its present 
geographical limits ; to the West it reached only 
to the Mississippi River, and not until 1803, by 
the purchase of Louisiana, did its territory extend 
north and west to the Pacific and south to the 
Gulf of Mexico. In addition to the thirteen 
original States, Vermont and Kentucky had been 
admitted to the Union; but the populated area of 
the country was only 366,000 square miles, against 
3,580,000 square miles to-day; and the total popu- 
lation was approximately 4,500,000, scattered along 
the Atlantic coast, the center being about the city 
of Baltimore ; while to-day the population is about 
70,000,000, or more than fifteen times as great, the 
center of population having moved almost directly 
west nearly 500 miles. 

It is hardly necessary to explain that the com- 
merce of the country in 1795 gave httle promise of 
what it has since become. The only efficient means 
of transportation were, of course, by water, travel by 
land being a tedious process, in wagons or on horse- 
back, over rough and unsatisfactory roads. It is 
self-evident that domestic trade at that time was of 
a primitive character, and any attempt to fully char- 
acterize it must fail except in so far as indicated by 
a comparison of imports and exports. 

Leading domestic industries one hundred years 
ago included the manufacture of household and 
other (chiefly wool and hemp) textile products and 
rag carpets, pig and bar iron in a small way, wheel- 
wrighting and smithing, lumber, carpentry, furniture, 
wagons, harness, hats, shoes, ships, and meat pro- 
ducts, the whole probably not aggregating very 
many million dollars in value annually, A review 

of the total value of the annual products of these or 
like domestic industries in the census year 1890 
presents a picture of unparalleled expansion, the 
value of the products in the nineteen lines indicated 
amounting five years ago to the enormous total of 
more than $4,107,000,000, in addition to which our 
metallic and mineral products in 1890 were valued 
at fully $587,000,000. It would be impracticable 
to indicate fully the thousand and one kindred in- 
dustries to which some of those identified with the 
earlier history of our country have given rise. And 
no reader of these pages need be reminded of the 
enormous stimulus to the production of wealth 
resulting from the railroad, which is only about sixty 
years old, from the discovery of petroleum or min- 
eral oil, the manufacture of illuminating gas, and 
the production and development of electrical motors 
and appliances. 

The total value of foreign shipments from the 
United States in 1 795 was about $47,989,000, which, 
while small when viewed from the standpoint of to- 
day, meant a great deal at the time, in that it repre- 
sented an increase of 1 50 per cent, over the total four 
years previous. The exports were mainly to France 
and her possessions, the free cities of Hamburg and 
Bremen, Great Britain and her dependencies, Spain 
and her possessions, the United Netherlands, the 
Danish West Indies, Italy, China, and the East 
Indies. Traffic with Russia was of some impor- 
tance, but with the other countries of northern 
Europe it was inconsiderable. 

A fair estimate of the character of our export 
trade at that time may be gained from a report of 
the Secretary of the Treasury in 1793, covering the 
year 1792, which enumerates, among the leading 
articles of foreign shipment, breadstufi^s, tobacco, 
rice, wood, salted fish, pot and pearl ash, salted 
meats, indigo, horses, mules, whale-oil, flaxseed, tar, 
pitch, and turpentine, breadstuffs constituting more 
than one third of the whole. South Carolina and 




Georgia were prominent as producers and shippers 
of indigo, but that was before cotton had become a 
noteworthy product. It had been grown and ex- 
ported as early as 1791, but only in small quantities ; 
the cotton-gin, invented by Eli Whitney, did not 
appear until two years later. In his celebrated re- 
port on Manufactures, Secretary Hamilton, though 
expressing the hope of a future of usefulness for the 
cotton industry, yet said that, " not being, like hemp, 
an universal production of the country, it afforded 
less assurance of an adequate internal supply ;" and 
he devoted some space to the advocacy of the re- 
peal of the duty on imported cotton, as well as of 
granting a bounty on cotton produced in the United 
States, when wrought at a home manufactory. In 
a comparatively few years, however, all this had 
changed, and American cotton had become a factor 
of the first importance in the commerce of the world. 

At the period under consideration the import ex- 
ceeded the export trade in value. Imports for the 
year 1795 were valued at $69,756,258. Of this 
total, $30,972,215 came from Great Britain and 
her possessions, England furnishing $21,108,350. 
Next in importance was France and her possessions, 
of which contributions the French West Indies sup- 
plied the greater share. Following these came in 
order Spain and her possessions, the United Nether- 
lands and their possessions, the Danish West Indies, 
Portugal and her possessions, Hamburg and Bremen, 
Russia, China, and the East Indies. The importa- 
tions from Great Britain comprised manufactures of 
wool, cotton, linen, silk, metal, glass, and paper, 
together with salt, steel, lead, nails, cheese, beer, 
and porter; those from the East Indies included 
cotton, sugar, and pepper; from the West Indies, 
spirits, sugar, and coffee ; and from other countries, 
coffee, sugar, molasses, brandy, gin, wines, and tea. 

Although the total value of exports from the 
United States one hundred years ago was $47,989,- 
472, by 1844 (fifty years later) it had grown to 
$105,745,832 — more than doubled. It was during 
this period, of course, that highways were con- 
structed between some of the larger trading centers, 
that the Erie Canal was built, and that the country 
reached a high degree of prosperity as a commercial 
nation. It was obliged to wait for the development 
of its agricultural resources and its shipping interests 
on the New England, south Atlantic, and Gulf 
coasts. The total value of importations in 1795 
was $67,756,258, and fifty years later (in 1844) it 
had grown to $102,604,606, an increase of more 
than fifty per cent. 

While to no nation has been given a preeminent 

manufacturing genius, yet we have probably de- 
veloped pecuHar skill not only in improving upon 
inventions which came to us in the rough, but also 
in the more general utilization of them upon a much 
grander scale. At the outbreak of our late Civil 
War the total value of exports had increased to 
$333,576,057, about seven times the value sent 
abroad in 1795. The aggregate value of importa- 
tions in i860 was $353,616,119, being five times 
the corresponding total in 1795. 

In 1877, at the beginning of the revival after the 
period of depression following the panic of 1873 
(which was the outcome of inflation, overtrading, 
and speculation succeeding the war), exportations 
for the year were valued at $602,475,220, or about 
twice the like total in i860, and nearly twelve times 
the value of shipments abroad in 1795. Importa- 
tions in 1877 were valued at $451,323,126, an in- 
crease of forty per cent, over the total in i860, and 
nearly seven times the aggregate value in 1795. 
From 1877 a rapid expansion in the volume of our 
domestic and foreign trade took place, not only in 
exportations of cereal and other domestic products, 
but owing to the extension of our railroad system 
and the diversification and development of our 
manufacturing industries. Over-speculation in finan- 
cial circles brought on the panic of 1884, which 
was followed by a reaction in business, and after that 
came a wide expansion of trade in 1890, 1891, and 
1892, followed by the panic of two years ago. 

In the fiscal year 1894, one hundred years after, 
the total value of exports amounted to $1,0 19, 572, - 
873, forty per cent, more than in 1877, three times 
the value of shipments abroad in i860, and more 
than twenty-one times the total value of our exports 
in 1795. The aggregate value of importations into 
the United States in 1894 was $740,730,822, an in- 
crease of sixty per cent, as compared with 1877, 
more than double the corresponding total in i860, 
and eleven times the total value of importations in 


An indication of the grand total value of the in- 
terior and exterior commerce of the United States 
must be an approximation only, owing to the dearth 
of statistics. One hundred years ago the total 
value of imports and exports amounted to only 
$117,745,730, but in 1894 like totals aggregated 
$1,760,203,695, or fifteen times as much. While 
there are not the necessary data to indicate closely 
the total volume of our domestic trade at the close of 
the last century, there is, of course, much, although 
incomplete, information bearing upon the interior 
traffic of the United States to-day. 



Any general estimate of the wealth of the coun- 
try at the close of the last century is, of course, de- 
ficient when contrasted with census reports on that 
subject during the past forty years. The total, 
$620,000,000, is the appraisement of the value of 
houses and lands one hundred years ago, and must, 
of course, overlook much personal property of value, 
particularly in that it does not take account of the 
value of slaves. But even if one should presume 
that, with all allowances for this and other omitted 
items, the grand total was as much as $900,000,000, 
the contrast with the total wealth of the country in 
1850, after half a centiu-y of growth, was starthng 
indeed, showing an increase of nearly eightfold. 

By i860 we had more than doubled the material 
resources of 1850. The ratio of gain from 1795 to 
i860 (when the total was $16,157,000,000), was still 
more remarkable, showing more than sixteen times 
the total at the close of the last century. From 
1 860 onward the increase of national wealth was so 
rapid that comparisons with the beginning of the 
century become fairly amazing. The increase by 
1870 was nearly twenty -seven to one, in 1880 nearly 
forty-nine to one, and in 1890, less than a century 
having elapsed, the total wealth of the country was 
nearly seventy-five times that in 1795, the census 
placing it at $65,037,000,000. 

When it comes to the development of our trans- 
portation interests by land and water, the record of 
expansion of our railroad traffic within sixty years is 
seen to surpass that of the remainder of the civilized 
world, with 178,000 miles of main line of railways, 
$5,075,000,000 of capital stock, $5,665,000,000 of 
funded indebtedness, $1,080,000,000 of gross an- 
nual earnings, and net traffic earnings of $322,000,- 
000 per annum, the railways having transported 
about 675,000,000 tons of freight alone in 1894. 
Our marine transportation interests, notwithstanding 
the check since the Civil War, present a total of 
25,540 craft registered at United States interior 
cities and ports, sailing from the Pacific, Gulf, 
and Atlantic coasts, on the Mississippi, Ohio, and 
Monongahela rivers, and on the Great Lakes, valued 
at $215,000,000. Freight transportation on the 
Mississippi, Ohio, and Monongahela rivers in 1894 
did not vary much from 22,000,000 tons, or a little 
more than half that estimated to have been carried 
on the Great Lakes, where the total was about 40,- 
000,000 tons. On the Erie and tributary canals the 
total tonnage last year probably amounted to about 
one tenth that on the Great Lakes, or 4,000,000 
tons, which would leave probably not to exceed 
125,000,000 tons of freight carried seaward per 

annum in vessels registered at the United States 
ports. This indicates that the total freight tonnage 
transported by water on the Mississippi, Ohio, and 
Monongahela rivers, on the Great Lakes and the 
Erie Canal, and seaward on vessels registered at 
United States ports, is less than one third the weight 
of freight transported by the railways of the country 
each year. 

Another evidence of the rapidity of the growth of 
the wealth of the country is conveyed in the fact 
that, whereas the government receipts in 1795 
amounted to only $9,419,802, last year they aggre- 
gated $313,310,166, more than thirty-four times as 
much; and while the expenditures of the govern- 
ment in 1795 amounted to $10,435,070, last year 
they were more than thirty-five times as much — 
$356,135,215. On the other side, there was a pub- 
lic debt of $80,747,587 one hundred years ago (a 
dozen or more years after the close of the Revo- 
lutionary War), while on December i, 1895, the net 
national debt was not quite fourteen times as large, 
amounting to only $1,125,883,997. The signifi- 
cance of this exhibit lies in the fact that notwith- 
standing the enormous expense involved in four 
years of Civil War — three decades ago ; notwith- 
standing the consequent check to commercial and 
industrial enterprise in those and in succeeding years 
of rehabilitation, yet so great were our powers of re- 
cuperation, and so remarkable was the abihty of the 
nation to liquidate its enormous war debt, that we 
find ourselves to-day with a national debt of only 
$16 per capita, as contrasted with one of $18 per 
capita one hundred years ago — a dozen years after 
the close of the War of the Revolution. These 
facts in reference to the relative national indebted- 
ness, at once interesting as well as instructive, gather 
significance when viewed in conjunction with best 
obtainable data respecting the wealth of the country 
one hundred years ago and to-day. The strength of 
our position may be expressed in the statement that 
whereas our national debt amounted to $18 per 
capita at the close of the last century, and our 
national wealth approximately to $200 per capita — 
to-day the national debt is only $16 per capita, and 
the wealth per individual somewhat more than 
$1000. The postal service, of modest propor- 
tions in 1795, had already begun to show remark- 
able growth, for from the time the Constitution went 
into effect the number of post-offices had grown 
from 75 to 453. At this time there are more than 
70,000 post-oflSces in the country, and the revenue 
and expenses have increased in almost as great a 



Charles F. Clark. 



Recognizing the many and diverse elements in- 
volved in any discussion of the volume of domestic 
trade, it remains to be pointed out that the total 
amount of gross earnings of railroads in the United 
States in 1894 amounted to $1,080,305,000, or $61,- 
000,000 more than the total volume of our exports 
of produce, coin, and bullion for that year, and 
more than twice the volume of gross railway earn- 
ings in 1877, seventeen years ago. 

The foregoing outline of some of the more im- 
portant elements involved in any consideration of 
the development of the commerce and the wealth of 
the United States during the past century must for- 
ever stand out conspicuously, as indicating a rapidity 
and withal a conservatism of growth on the part of 
a new empire the like of which the world has never 

Perhaps as fair an indication, within limitations, 
of our total volume of wholesale business, foreign 
and domestic, is that given by totals of transactions 
at clearing-house banks — about 1000 in number — 
at nearly eighty of the more important cities. Dur- 
ing 1894 the grand total of bank clearings aggre- 
gated nearly $45,000,000,000, although the corre- 
sponding total two years before amounted to nearly 
$62,000,000,000, the largest annual aggregate re- 
ported since clearing-house totals have been col- 
lected. These transactions represent, for the most 
part, wholesale dealings at nearly all the larger towns 
and cities throughout the country, and, to a smaller 
extent, retail transactions in that portion of the busi- 
ness of the country which are settled with checks. 

It would not be so bold a stroke as it might ap- 
pear to estimate the probable approximate grand 
total of business transacted annually, not only 
through the banks, but across counters, both whole- 
sale and retail. The average total of bank clearings 
annually during the past five years has been about 
$55,000,000,000, or thirty-two times the total value 
of our exports and imports, including coin and bul- 
lion, in the fiscal year 1894. This indicates in some 
degree the enormous preponderance in the value of 
our total commercial and industrial transactions, as 
compared with that portion carried on with foreign 
countries. It would be difficult to conceive of the 
total value of all our domestic and foreign commerce 
(judged by bank-clearing totals and other available 
data) as averaging less than $70,000,000,000 annu- 
ally, and probably a larger sum would be required 
to gauge it. 

Perhaps as striking an indication of the enormous 
expansion of wealth and business in the United States 
within one hundred years as any other is found in 

the statement that whereas the approximate total 
banking capital of the country in 1795 was about 
$12,000,000, the total capital of national and other 
banks two years ago, as reported by the comptroller 
of the currency, amounted to $1,067,000,000, in 
addition to which there were reported belonging to 
the banks $686,000,000 of surpluses and profits. 
From this it would appear that whereas the total avail- 
able banking capital of the country one hundred 
years ago was only about $2.65 per capita, the pro- 
portion per capita two years ago was only about six 
times as much. Yet the banking capital of the 
country two years ago was about eighty-nine times 
the amount in 1795. It may strike many as 
remarkable that, whereas the population has in- 
creased fifteen-fold, the volume of business probably 
thirty-three times, and the wealth of the country more 
than seventy-five times within the last one hundred 
years the total banking capital is, in round num- 
bers, only about six times as much per capita to-day 
as at the close of the last century. The lesson 
taught by this is most timely in this day of ex- 
cessive and frequently unnecessary fears that the 
volume of the currency of the country will not be 
maintained at the maximum. The development of 
the clearing-house principle in business, the syste- 
matic organization and wide-spread distribution of 
credits of merchants and manufacturers, together 
with the enormously increased use of checks, drafts, 
and bills of exchange, — representatives of credit, — 
are practically responsible for the ability of the banks 
to do the enormous business of the country on only 
six times the banking capital per capita they pos- 
sessed one hundred years ago. 

With the tenfold increase in populated area of the 
country our population is fifteen times as large as it 
was at the close of the last century, while the in- 
creasing complexity of governmental administration 
has increased total receipts from customs and inter- 
nal revenue thirty-four times and expenses thirty- 
five times what they were in 1795. It may be no 
more than a coincidence, but it is certainly note- 
worthy that an increase of 1500 per cent, in popula- 
tion has brought with it almost the same increase 
in the total annual volume of exports and imports. 
The fact that total gross railway earnings have 
doubled in seventeen years is far less significant than 
that they are in excess of the total volume of our 
exports of merchandise, produce, coin, and bullion. 
But of even greater interest is the fact that the an- 
nual volume of bank clearings at about eighty cities 
throughout the United States indicates a grand total 
of domestic and foreign trade probably forty times 



greater than the total value of exports and of im- 
ports. There remains only to be recalled the in- 
crease of our interior commerce to thirty-eight 
times the volume of our business with foreign 
countries, over and above which is the picture 
of the total wealth of the country — nearly seventy- 
five times what it was at the beginning of the 

In thus concluding a hurried and necessarily brief 
review of some of the more salient features of the 
development of the wealth, trade, and manufactur- 
ing industries of the United States, the suggestion 
is almost involuntary that there still remains, in spite 
of much that has been accompHshed in recording our 

material advancement, an opportunity for perfecting 
and supplying systems by which records may be 
kept of various spheres of activity. It is a matter 
of regret that more definite information is not ob- 
tainable respecting what should go to make up an 
accurate estimate of the total volume of the trade of 
the country. It is highly probable that estimates 
and calculations presented herewith get as close to 
the fact as practicable, yet much might be done 
were statistics affecting trading, transportation, and 
banking compiled and prepared with the system 
and comprehensiveness which mark reports of the 
Census Department on manufactiu-ing industries of 
the country. 



THE word "corporation" is comprehensive. 
Every nation, every State, every city, town, 
and village, is a corporation. Every parish 
and every similar church society is a corporation, 
and so are most of our colleges and institutions of 
learning. The history of such corporations during 
the last hundred years, interwoven as it is with our 
national development, would fill volumes ; but in this 
article the writer must confine himself to some re- 
marks upon the corporation with which we are famil- 
iar in business — the ordinary joint-stock corporation, 
operated for the profit of the shareholders. The part 
played by such corporations in the history of the 
last century of American commerce is a conspicuous 
one, and a concise historical sketch of this impor- 
tant form of business organization, giving a brief 
glimpse at its remarkable growth, together with 
some reflections as to its influence upon the business 
community and the country at large, should be of 

In 1795 business corporations in America were 
small in number and insignificant as to wealth. 
There were, to be sure, several banks, a number of 
insurance companies, a few turnpike companies, 
some stage-coach companies, and some manufac- 
turing corporations. The bulk of the business of 
the country was conducted, however, by individual 
traders or by partnership concerns. With the 
growth of trade and the increase in commercial 
activity of all sorts the organization of corporations 
was speedily resorted to as offering many advan- 
tages over the old-fashioned partnership. Among 
those advantages is the opportunity afforded to all 
to embark such part of their property as they may 
choose in enterprises, whatever they may be, with- 
out incurring the liability of general partners ; in 
other words, a man can invest such sum as he is 
willing to lose in the business, with the certainty 
that he cannot be compelled to pay anything beyond 
that amount toward the debts of the concern. 

Then, again, a shareholder in a corporation has his 
affairs managed for him by salaried officers, without 
care or responsibility on his part. 

At first, in order to organize a corporation, legis- 
lative action was required in every case. This in 
earlier times answered very well; but this power 
was abused, and by and by it was found necessary 
to limit the power of the various State legislatures in 
this respect. Corporations are, in the eye of the 
law, persons, — artificial persons, — and it was found 
that a person of this description, having no body to 
be imprisoned nor soul to be eternally punished, was 
hard to control ; so the legislatvu^es from time to 
time passed general laws regulating the formation 
and management of corporations, endeavoring in this 
way to restrict them as to power, and to force them 
to confine themselves each to its own particular 
business. Efforts have been made from time to 
time by the State legislatures to enact a systematic 
code regulating all corporations, with more or less 
success ; so now we have in many States a general 
law for banking corporations, another for insurance 
companies, another for trust companies, another for 
railroads, and there are still others. Recently, also, 
following the example of the English Parliament, 
many of the States have enacted laws under which 
corporations may be organized to carry on any 
legitimate business, no matter what, not already 
provided for by general statutes. 

There can be no question that corporate organi- 
zation has been of great advantage to the country — 
to the poor as well as to the rich. By greater econ- 
omy in production, rendered possible by concentra- 
tion of capital, the poor have profited in the reduced 
price of most of the necessaries and comforts of life. 
The reduction in the prices of these articles is a 
most interesting subject for study and reflection, and 
if space permitted it would be easy to give numer- 
ous illustrations. Indeed, it would be hard to find 
any considerable number of articles, commonly 




called comforts or necessaries, the price of which 
has not been reduced by the direct influence of cor- 
porate management. The comfort and convenience 
of all dwellers in this country have been greatly pro- 
moted by corporate control of business. Take, for 
instance, our facilities for traveling. Again, the 
regularity and cheapness of communication by mail, 
telegraph, and telephone have only been made pos- 
sible by the cooperation of hundreds of corporations 
all working together in intelligent harmony. Again, 
what could we now do without banks, and without 
insurance companies? We owe it to the corpora- 
tions that we can protect our property against loss 
by fire, and oiu- families from want in the case of 
the death of their breadwinner ; and to the savings- 
banks that we can safely keep our surplus earnings, 
and receive them back again, safe and intact, with 
reasonable interest. And so we may sum it all up 
in one word and say that the conditions of modem 
life would be impossible were it not for the corpora- 
tions. Whether sleeping or waking, engaged in busi- 
ness or pleasure, eating, drinking, dressing, or trav- 
eling, or whatever we may be about, we must thank 
them to a great extent for the means and opportu- 
nity of doing so. 

The reduction in the price of articles of general 
consumption, to which reference has been made, is 
due, in the writer's opinion, to two causes which in 
their operation would at first glance seem calculated 
to produce contrary results, but which, in fact, both 
tend to the same end. These two causes are com- 
petition and consolidation. It is easy to see how 
competition between two or more concerns engaged 
in the production of an article would tend to lower 
its price until a point should be reached when but a 
narrow margin of profit would remain. The con- 
solidation, on the other hand, of all the competing 
concerns engaged in the same business would seem 
to tend to an advance in the price of the commodity 
produced. This would doubtless be the case at first. 
But experience has shown that there is more money 
in selling a large quantity at a small profit than in 
selling a small quantity at a large profit, and the 
application of this principle results, as has been said 
above, in the ultimate reduction of the price. A 
most notable instance of this truth is to be found 
in the enormous reduction of the price of kerosene- 
oil since the consolidation into one company of the 
various corporations engaged in its production. 

How great have been the advantages to our 
commerce and our country's development from cor- 
porate organization no one can say. Have these 
advantages been to some extent counterbalanced by 

certain evils? The concentration of wealth in the 
hands of corporations has had the effect of driving 
the individual producer out of business. In the 
early days of our country's existence many industries 
were carried on in the towns and villages by skilled 
workmen who were their own masters, and who 
were in business for themselves. Tailors, shoe- 
makers, weavers, blacksmiths, tinsmiths, saddlers, 
and many other manufacturers on a small scale 
carried on their business for their own account, and 
were a useful, self-reliant, and manly element in our 
population. These industries are now to a great 
extent monopolized by large corporations, and the 
men who were formerly independent in their busi- 
ness are now represented by salaried workmen. 
The gradual extinction of this class of men of mod- 
erate means who carried on their business for their 
own account seems to be a distinct loss to the com- 

In the earlier days of the history of this country 
om- foreign commerce was entirely, or almost en- 
tirely, in the hands of individual traders and private 
partnerships. The vessels by means of which the 
trade was carried on were owned by individuals, 
the ownership of a vessel being divided sometimes 
among a number of persons, the captain in many 
cases being a part owner. The cargo of the vessel, 
on its arrival at its port of destination, was disposed 
of by the captain or by a supercargo for the benefit 
of the owners, and the proceeds invested at his dis- 
cretion in the return cargo. This method of doing 
business afforded a good field for the exercise of 
individual skill, and the profits made by those en- 
gaged in it were far in excess of anything that can 
be realized by traders of the present day. The sub- 
marine cables going to all parts of the world, owned 
by corporations, have entirely revolutionized our 
foreign trade. Our individual ship owners have 
nearly all retired from the business, and the carrying 
trade of the country is done by steam-vessels owned 
by corporations, and, sad to say, nearly all of them 
are owned by foreign capitahsts and manned by 
foreign sailors. No doubt the greatest good of the 
greatest number is promoted by the operation of 
great industries in corporate hands. The cost of 
living is reduced ; but the disappearance from the 
ocean of American ships commanded by American 
skippers and manned by American sailors is a dis- 
tinct misfortune. Whether this disappearance can 
fairly be traced, altogether or in part, to the influence 
of corporate organizations is a question which can 
never be answered. It is perhaps partly due to this 
cause and partly to other causes, just as the concen- 

William Jay. 



tration of business above referred to in the hands of 
large corporations and wealthy people is partly due 
to corporate organizations and partly to the improve- 
ments in methods and machinery introduced by the 
inventive genius of modern times. 

Another evil growing out of the great develop- 
ment of corporate control of business is a lower- 
ing of the standard of business honor and business 
morality. The administration of the affairs of cor- 
porations of our country by their directors has in 
many instances been unfair to the stockholders, and 
to a corresponding extent advantageous to the 
directors. It cannot be denied that many large 
fortunes have been made by men who availed 
themselves of the knowledge acquired by them as 
directors of the affairs of corporations to buy and 
sell the shares for their own profit. Many a director 
in a corporation would consider it preposterous to 
be told that he had no right to trade in the stock 
of his corporation, and yet the director is to all in- 
tents and purposes a trustee for the stockholders, 
and ought not, any more than any other trustee, to 
trade in the trust estate. More than this, it has not 
been at all uncommon for directors to engage in 
transactions with their own company, the result of 
which has been greatly to their own advantage. 
How many railroad companies have been wrecked 
by being saddled with worthless lines with which 
they have been consolidated ? Many other instances 
might be cited where directors, under form of law, 
have bled the corporations for which they were act- 
ing. The directorate, for instance, of some great 
corporate interest, rightfully active within a certain 
field, leases in the form of privileges certain of its 
functions to outside corporations, in the success of 
which its members are concerned. Valuable con- 
cessions, involving thousands of annual revenue, are 
granted for the most nominal considerations, and 
the tributary companies wax rich and pay large 
dividends, while the great corporation whose reve- 
nues are thus diverted from its stockholders pays 
none at all, and its only beneficiaries are found 
among the directors, who have thus misused their 
power for their own ends. 

Vast sums of money, American and foreign cap- 
ital, have been invested in enterprises in this coun- 
try under corporate control. A great deal of this 


money has been lost to the investor forever. Some 
of it has gone because the project in its inception 
was ill considered, and the blame must rest upon 
the poor judgment of the investor ; but too many 
schemes have been floated by corporations con- 
ceived in fraud, through which confiding investors 
have been fleeced. A common form of swindle is 
an issue of bonds secured upon nothing but a fran- 
chise that has cost the corporation nothing. A 
fraction of the proceeds may be used in construc- 
tion ; the balance may be, and often has been, dis- 
tributed among the promoters. An allusion to this 
form of corporate dishonesty is all that space admits 
of ; were it not so, it would be instructive to refer 
here at some length to the common device of 
dishonest directors who contract with so-called con- 
struction companies in which they are themselves 
the shareholders, thereby reaping a dishonest profit. 

The power of corporate organization has been 
invoked to work great hardship and wrong in many 
cases to the towns and cities throughout the coun- 
try. Franchises of enormous value — especially the 
right to use the streets for elevated and surface 
roads — have been obtained for a most inadequate 
consideration. This abuse of power by corporations 
has been demoralizing in its tendency and mischiev- 
ous in its results. It is impossible to compare our 
great cities with those of Europe without feeling 
that ours have been vulgarized, degraded, and ren- 
dered hideous by the appropriation of their princi- 
pal streets by private corporations for private greed. 
It is idle to say that public convenience requires 
that hideous structures like the elevated railroad 
should exist, or that cable-cars should be run on the 
surface of our principal thoroughfares. It is not so. 
It is not so in any other civilized country on earth, 
and would not be tolerated in any other civilized 
country. Perhaps we are not sc highly civilized as 
we think we are. 

The corporation is a tremendous power with us, 
both for good and evil. It is probable that as time 
goes on its powers will increase rather than diminish. 
By its means cheaper living, more comfort, and 
greater luxury will be brought within the reach of 
us all. Let us hope that a higher plane of business 
honor may be reached in the management of our 




IN the early part of the present century the 
commercial organizations then existing which 
had any material influence upon the home and 
foreign commerce of the nations of the earth were 
exceedingly limited in number. Indeed it is doubt- 
ful if at that period there were more than fourteen, 
viz., three in Great Britain, seven in France, and 
four in the United States. All of these, save two 
notable exceptions,— the Board of Trade of England 
and the Council General of Commerce of Paris, — 
were largely synonymous in their vocations and 

In France Chambers of Commerce had been in- 
stituted at a very early date — notably at Marseilles, 
at the close of the fourteenth or the beginning of 
the fifteenth century; at Dunkirk, in 1700; at 
Paris, in the same year; at Lyons, in 1702; at 
Rouen and Toulouse, in 1703; at MontpeUier, in 
1704; and at Bordeaux, in 1705. While England 
had her Board of Trade as early as 1660, it was not 
until 1786 that the present department was estab- 
lished in Council, being a permanent committee of 
the Privy Council for the consideration of all mat- 
ters relating to trade and the colonies, with functions 
partly ministerial and partly judicial. Of Chambers 
of Commerce, Great Britain then had but two : that 
of Glasgow, instituted in 1783, and of Edinburgh, 
founded in 1785, and incorporated by royal charter 
in 1786. 

In the United States the oldest existing Chamber 
of Commerce is that of New York, organized in 
1768, and incorporated by royal charter in 1770. 
Shortly afterward a second was established at New 
Haven, Conn. ; another at Charleston, S. C, about 
1775 ; and that in Philadelphia in 1802. It is true 
that New York about this time had also a Board of 
Brokers, organized about 1792 or 1793, and had 
erected the Tontine CofTee-House, where merchants 
and others met and discussed mercantile and semi- 
commercial questions. 

The Chamber of Commerce of New York is in 
some respects not only the forerunner but the type 
of many like institutions which have been organized 
in our leading cities, representing, both locally and 
otherwise, our multiplying and diversified industrial 
interests. In some instances, however, it essentially 
differs from other kindred institutions, since, while 
caring for local welfare, it is also broadly national 
in its sympathies and work. In this connection it 
may be interesting to trace back this time-honored 
organization to the names of the old and respected 
merchants who founded it. They were : John 
Cruger, Elias Desbrosses, James Jauncey, Jacob 
Walton, Robert Murray, Hugh Wallace, George 
Folliot, WiUiam Walton, Samuel Verplanck, Theo- 
phylact Bache, Thomas White, Miles Sherbrook, 
Walter Franklin, Robert Ross Waddell, Acheson 
Thompson, Lawrence Kortwright, Thomas Randal, 
William McAdam, Isaac Low, Anthony Van Dam, 
John Alsop, Philip Livingston, Henry White, and 
James McEvers. It also may not be out of place 
to reproduce the original terms used in its formal 
organization, reciting its usefulness as follows: 
" Whereas, Mercantile societies have been found 
very useful in trading cities for promoting and en- 
couraging commerce, supporting industry, adjusting 
disputes relative to trade and navigation, and pro- 
curing such laws and regulations as may be found 
necessary for the benefit of trades in general. . . ." 

Of the history and character of the persons who 
are here recorded as the original founders of this 
Chamber the memories of the present generation 
will not be wholly obHvious. The first public place 
of meeting of the original Chamber was at the house, 
now standing, on the corner of Pearl and Broad 
streets. This building had been originally erected 
as a town residence, and had undergone many alter- 
ations in size and form. During the period of 
Washington's first residence in this city it was chiefly 
remarkable as being a public tavern, where in later 




days Washington was entertained and took his fare- 
well of the officers of the army on his departure for 
his home in Virginia at the close of the Revolution- 
ary War. The subsequent meetings of the Chamber 
were held, first, in 1769, in the "great room of the 
building commonly called the ' Exchange,' at the 
lower end of the street called Broad " ; afterward, in 
1779, at the Merchants' Coffee-House, on the south- 
east corner of Wall and Water streets; in 18 17 at 
the Tontine Coffee-House, on the northwest corner 
of Wall and Water streets; in 1827 in the original 
Merchants' Exchange (in a room specially set apart 
for the purpose), until that building was destroyed 
by fire in 1835; then for a time in the directors' 
room of the Merchants' Bank on Wall Street ; then 
in premises on the corner of William and Cedar 
streets, where the Chamber remained for many 
years prior to its final removal to its present com- 
modious quarters on Nassau Street. 

At the close of the Revolution the legislature of 
New York passed an act (on the 13th of April, 
1784) "to remove doubts concerning the corpora- 
tion of the Chamber of Commerce, and to confirm 
the rights and privileges thereof." Under this act 
the title was changed from the " Chamber of Com- 
merce " to the " Chamber of Commerce of the State 
of New York." From the earlier days down to the 
present period the membership has been principally 
confined to citizens engaged in finance and com- 
merce, although at different times our records show 
that public officers of the highest rank, including 
presidents, governors, Senators, Congressmen, for- 
eign ministers, and members of the State legislature, 
have been either honorary or regular members of 
the Chamber of Commerce. In the earlier steps 
taken, almost a century ago, to form a code of 
commercial laws and regulations, the most prominent 
merchants of that era determined and bound them- 
selves reciprocally to prevent " the scandalous prac- 
tice of smuggling." Within two years after the 
evacuation of the city of New York by the British 
a strong effort was made in the new State legisla- 
ture to adopt a plan for issuing paper money, to be 
made by law a legal tender in the transaction of 
business. A memorial was adopted by the Cham- 
ber, setting forth in the most forcible terms the evils 
and immorality of such an issue, and through its in- 
fluence the proposed measure was defeated. It may 
be safely alleged that to the good sense and active 
management of the Chamber may be attributed the 
policy which the general government adopted at 
this period of peril, whereby the credit of the nation 
was maintained. At an early period in the active 

movements of the Chamber, in January, 1786, a 
resolution was considered asking the assistance of 
the legislature of New York for the creation of a 
fund to connect the city of New York by artificial 
navigation with the lakes. This action clearly con- 
nects the sentiments of the Chamber of that early 
day with the great purpose of Governor Clinton for 
the construction of the Erie Canal. A few years 
later we find the Chamber entertaining the project 
for the construction of a ship-canal around Niagara 
Falls, and a railroad from Lake Erie to the Hudson 

The question of tribunals of commerce was also 
considered at several periods of its history ; but the 
legislature was not friendly to this new departure in 
commercial jurisprudence until 1874, when an act 
was passed establishing a court of arbitration, to be 
presided over by a judge appointed by the gover- 
nor ; and this court continues to this day. Another 
highly important subject had from time to time 
occupied the attention of the Chamber, that of 
the pilot laws of New York and New Jersey, result- 
ing in the present excellent system. At the annual 
meeting in 1 848 the Chamber took formal measures 
to assist in organizing a savings bank for the benefit 
of " merchants' clerks and others " ; and a charter 
was granted by the legislature as the result of this 
thoughtful action, and since then this institution has 
grown to be one of the most successful of similar 
organizations in the country. In 1849 the Chamber 
was interested in Whitney's project for the construc- 
tion of a Pacific railroad across the continent, and 
a report favoring its construction was unanimously 
adopted and forwarded to Congress. It was also 
instrumental in getting the United States govern- 
ment to remove the sunken rocks from the channel 
of the East River and to widen the passage through 
Hell Gate. In 1852 the Chamber took active mea- 
sures in regard to the reciprocity agreement with 
the North American provinces for the free inter- 
change of the natural productions of the respective 
countries, embracing also a full and joint participa- 
tion in the fisheries and the free navigation of the 
river St. Lawrence. It also repeatedly declared its 
sentiments on the subject of privateering, and has 
at all times maintained its inviolable determination 
to adhere rigidly to the principles avowed by the 
government of the United States. 

The treaty negotiated with Japan by Commodore 
Perry, in behalf of the United States, opened up a 
new pathway to commerce with an almost unknown 
nation, and the Chamber took a prominent part in 
giving signal testimony of its appreciation of that 



officer's conduct in a graceful gift of a silver service 
of plate. At a special meeting of the Chamber, held 
the 2ist of August, 1858, the successful result of the 
united efforts of the English and American nations 
to lay the first Atlantic telegraph-cable to connect 
the continent of the Old World with the New was 
announced, and the sum of $10,000 was appropri- 
ated and applied to the presentation of gold medals 
to the prominent officers engaged in carrying out 
the enterprise. At the meeting of the Chamber, 
September 6, i860, the following resolution was 
adopted: ''Resolved, That in the Judgment of this 
Chamber an urgent necessity exists for the establish- 
ment, at an early day, of mail facilities between the 
cities of San Francisco in California and Shanghai 
in China, with connections at such intermediate 
ports as the interests of commerce may indicate." 
It seems hardly necessary to add that the above is 
the germ from which has sprung the magnificent 
hne of American steamships which traverses the 
Pacific Ocean to-day. 

A remarkable epoch in the affairs of this country, 
and one especially affecting all its business interests, 
occurred shortly after this period. The Southern 
States of the Union had united in revolt against the 
government, and the President had issued his proc- 
lamation calling for military aid. The Chamber 
responded to this appeal by holding a large and 
enthusiastic meeting on April 19, 1861, at which 
an ample sum of money was raised to forward at 
once for the defense of the national capital two 
regiments of the State National Guard, and also to 
organize several additional regiments of volunteers, 
who left shortly afterward for the seat of war. At 
this meeting attention was called to the fact that 
a part of the advertised loan of the government 
remained untaken. A special committee was ap- 
pointed, and the balance, amounting to $8,000,000, 
was at once subscribed, and the Treasury Depart- 
ment notified that the same could be drawn for at 
once. The great mass-meeting at Union Square — 
now a matter of history — and the Union Defense 
Committee were the outcome of the action of the 
Chamber. The valuable aid rendered to the gov- 
ernment by this committee, composed, as it was, 
mainly of merchants and bankers of New York, was 
frequently acknowledged by the highest military 
authorities, and sixty-six regiments were equipped 
and fitted for service and forwarded in the early 
stages of the war, as standing evidences of its loyalty 
and efficiency. 

At a special meeting of the Chamber held on 
May 15, 1872, "to give expression to the views of 

the Chamber on the Treaty of Washington (result- 
ing in the Geneva award arbitration), and to urge 
the ratification by the Senate of an additional article 
thereto, as proposed by Minister Schenck," the fol- 
lowing preamble and resolutions were adopted : 

" Whereas, The Treaty of Washington, referring 
the differences between this country and Great 
Britain to arbitration, has justly been regarded as a 
measure of great importance to the interests of civ- 
ilization and peace, and the honor of proposing it 
belongs to this country ; and 

" Whereas, Differences of opinion have arisen 
between the governments of the two countries re- 
specting the proper construction of the treaty in 
regard to the claims for indirect damages, and a 
supplemental article for settlement of those differ- 
ences has been proposed by the government of 
Great Britain, and by the President laid before the 
Senate for its advice, which article appears to this 
Chamber to be sound in principle, binding the two 
governments to the adoption of a beneficent rule for 
the future, and especially beneficial to the United 
States and its commerce ; and 

" Whereas, The failiue of the treaty would be a 
great public calamity ; therefore 

"Resolved, That this Chamber, without meaning 
thereby to imply that our government has at all 
erred in its construction of the treaty, and believing 
that the supplemental article is more than an equiv- 
alent for the claims of our government as originally 
presented, and feeling the importance of removing 
all obstacles in the way of the execution of the 
treaty, earnestly recommends the adoption of the 
supplemental article, and prays the Senate to ratify 

As the Senate was " hanging fire " in regard to 
the ratification of this treaty, and war between the 
two countries was apparently imminent, the action 
of the Chamber in this matter was not only timely 
and praiseworthy, but also wise, patriotic, and in- 
fluential, as the sequel showed. 

Thus it will be seen that to outline the history 
and operations of the New York Chamber of Com- 
merce is largely to portray the political, commer- 
cial, industrial, and financial development of the 
country ; for really no great politico-economic ques- 
tion has arisen in the United States from the War 
of 181 2-1 5 to the present time in which it has not 
been vitally and patriotically interested. The fore- 
going are, however, but few of the services which it 
has so signally performed. It has been concerned 
in nearly everything which related to the commer- 
cial welfare and prosperity not only of the city and 

Alexander E. Orr. 



State of New York, but also of the country at large, 
of which it is in a measure the commercial guardian. 

The class of people who possessed the most 
means and experience before and immediately after 
the Revolution were the merchants and ship owners, 
and they were the first to perceive the advantages 
and value of mercantile or commercial organizations, 
which, as already outlined, they perfected in New 
York, New Haven, Charleston, and Philadelphia. 
These commercial bodies were the initial organiza- 
tions of the kind in America. Their foundations 
were broad and deep, and each in its way and time 
performed substantial service for the public good, 
both local and general. The Chamber of Com- 
merce of Baltimore, instituted in the early decades 
of the century, but subsequently reorganized as the 
Board of Trade, still continues its usefulness. The 
Merchants' Exchanges of New York and Philadel- 
phia, which were founded at an earlier date, have 
passed away, probably from having been too heavily 
handicapped at first with expensive buildings and in- 
adequate revenues. 

Succeeding the War of 1812-15, and later, other 
Chambers of Commerce, Exchanges, and Boards 
of Trade were organized in various cities of the 
Union, which also have done much toward develop- 
ing the industries, trade, and traffic of their locali- 
ties, as well as taking more or less active part in 
promoting the general commercial welfare of the 
country. But the commercial associations which 
are the most numerous, and withal the strongest, are 
those founded by people who deal in like things in 
towns or cities which are to some extent centers of 
particular callings, such as cotton in New Orleans, 
leather or wool in Boston, iron in Philadelphia, 
crockery in Trenton, paper in Holyoke, or print 
cloths in Fall River or Providence. Among the 
earliest of the general Boards of Trade which still 
retain their vitality, and form an important element 
in the town or city in which they are located, is the 
Chicago Board of Trade, which came into existence 
on March 13, 1848, but did not begin business until 
May 2, 1850. From the beginning it has been an im- 
portant center for grain, animal-food products, and 
lumber. Similar boards were established in Detroit, 
Milwaukee, Cincinnati, St. Louis, Toledo, Minne- 
apolis, and other Western cities. That in St. Louis 
is also an important center for the cotton trade. 
Smaller organizations exist in towns numbering less 
than 10,000 inhabitants, and have proved valuable 
adjuncts by the infusion of greater local pride and 
energy among their citizens. 

Next to the New York Chamber of Commerce is 

the Associated Board of Trade of Boston. This is 
probably the best representative body among strictly 
business associations in this country. Founded on 
a new idea or plan, it has so demonstrated, during 
the few years of its existence, its great practicability 
and usefulness as to become the exemplar of the 
newer Boards of Trade throughout the country. 
The Boston Associated Board of Trade is not a 
promiscuous grouping of business men coming to- 
gether as individuals, but is made up of delegates 
from the various regularly organized trade associa- 
tions of that city, these representatives being duly 
elected by their own organizations, and attending 
the Associated Board of Trade meetings, to speak 
and act not only for themselves, but as voicing the 
wishes of the associations which send them. Thus, 
when the members of the Associated Board of 
Trade make a decision, their action is at once of 
importance (because of its comprehensiveness) in 
forming commercial and legislative opinion. 

As New York is the commercial metropolis of the 
United States, her merchants, of necessity, must be 
equally comprehensive in their dealings not only in 
home products, but also in those of all other coun- 
tries with whom they hold commercial relations. 
To facilitate the operation of this great concentra- 
tion of business it was found expedient to organize 
separate Exchanges and Boards of Trade, which as 
time passed have grown into large proportions. It is 
impossible in this short article to describe them all, 
— some seventy in number, — but a few of the more 
prominent may be mentioned. The New York 
Produce Exchange, with its 3000 members, specially 
deals in grain, flour, provisions, lard, tallow, etc. 
It possesses the finest exchange building in the 
United States, and its business and influence are 
proportionally great in the Hne of its specialties. 
The Stock Exchange confines its deahngs to stocks 
and bonds and other similar securities of this and 
other countries, and has given great impetus to the 
development of transportation in this country. The 
Cotton Exchange, which deals almost exclusively in 
that staple, buys and sells more cotton for future 
delivery than any other Cotton Exchange either at 
home or abroad. The Petroleum — now the Con- 
solidated — Exchange first dealt in petroleum and 
mineral oils, but of late years it has turned its atten- 
tion to stock securities, and is to some extent a 
competitor of the Stock Exchange. The Coffee 
Exchange has lately grown into very great promi- 
nence, and now surpasses in the volume of its busi- 
ness that of Havre, France, which is beheved to be 
the largest in Europe. The Mercantile Exchange 



confines its operations to farm products, such as 
butter, cheese, eggs, poultry, and the like, and now 
aggregates an enormous business. The Wool Ex- 
change and the Metal Exchange are other important 
associations, which, with the foregoing, own their 
buildings ; but besides these there are the Maritime 

ber of such organizations throughout the whole coun- 
try will probably reach 2000. 

The national and trade associations probably 
aggregate in number over one hundred. Following 
is a list of prominent national organizations, and 
their leading officers at the present time: 






American Association of Flint and Lime Glass Manu- ) 
facturers 5 

American Boiler Manufacturers' Association of the ( 
United States and Canada > 

American Iron and Steel Association 

Association of Iron and Steel Sheet Manufacturers 

Carriage Builders' National Association 

Heavy Hardware Jobbers' National Union 

Manufacturers' National Association _ 

Merchant Tailors' National Exchange of the United ) 

States 5 

Millers' National Association of the United States 

National Association of Builders 

National Association of Furniture Manufacturers 

National Association of Galvanized Sheet-Iron Manu- ) 

facturers 5 

National Association of Stove Manufacturers 

National Association of Wool Manufacturers 

National Board of Trade 

National Board of Trade of Cycle Manufacturers 

National Brick Manufacturers' Association of the ? 

United States 3 

National Cigar Manufacturers' Association 

National Confectioners' Association 

National Dairy Union 

National Hardware Association 

National Iron Roofing Association 

National Live Stock Exchange 

National Paint, Oil, and Varnish Association . 
National Retail Grocers' Association. 

National Retail Hardware Dealers' Association 

National Retail Jewelers' Association of the United ) 

States 5 

National Transportation Association. 

National Wholesale Druggists' Association 

Tinned Plate Manufacturers' Association of the } 

United States > 

United States Brewers' Association 

Vapor Stove Manufacturers' Association 

Vessel Owners' and Captains' National Association . . 

Pittsburg, Pa 

St. Louis, Mo 

Philadelphia, Pa. . . 

Pittsburg, Pa 

Philadelphia, Pa. . . 

Chicago, 111 

Cincinnati, O 

New York 

Milwaukee, Wis. . . 

Boston, Mass 

Indianapolis, Ind. . 

Pittsburg, Pa 

Chicago, 111 

Boston, Mass 

Boston, Mass 

Hartford, Conn. . . . 

Indianapolis, Ind.. 

New York, N. Y. . 

St. Louis, Mo 

Elgin, 111 

Philadelphia, Pa. . , 

Cincinnati, O 

Chicago, 111 , 

Chicago, 111 

Chicago, 111 

Boston, Mass 

St. Louis, Mo 

Chicago, 111 

Minneapolis, Minn 

Pittsburg, Pa 

New York, N. Y. , 

Cleveland, O 

Boston, Mass 

George W. Blair, Pittsburg, Pa. 
H. S. Robinson, Boston, Mass. 

B. F. Jones, Pittsburg, Pa. 

J. G. Battelle, Piqua, O. 
Channing M. Britton, New York. 

S. D. Kimbart, Chicago. 

Thomas Dolan, Philadelphia. 

Emile Twyeffort, New York. 

C. A. Pillsbury, Minneapolis, Minn. 
Charles A. Rupp, Buffalo, N. Y. 
Otto Strechhlan, Indianapolis, Ind. 

N. S. Whitaker, Wheeling, W. Va. 

Lazard Kahn, Hamilton, O. 
William H. Haile, Springfield,_Mass, 
Frederick Fraley, Philadelphia, Pa. 
A. G. Spalding, New York. 

F. H. Eggers, Cleveland, O. 

Moses Krohn, Cincinnati, O. 

John S. Gray, Detroit, Mich. 

W. D. Hoard, Fort Atkinson, Wis, 
5 William W. Supplee, 503 Market 
i St., Philadelphia, Pa. 

James Beichele, Canton, O. 

W. H. Thompson, Jr., Chicago, 111. 

! Howard B. French, Philadelphia, 
George A. Shurer, Peoria, IlL 

S. S. Bryan, Titusville, Pa. 

Herman Mauch, St. Louis, Mo. 

Frank Barry, Milwaukee, Wis. 
J. C. Eliel, Minneapolis, Minn. 

W. T. Graham, Bridgeport, O. 

Leo Ebert, Ironton, O. 
C Hon. D. Dangler, Dangler Stove 
\ Mfg. Co., Cleveland, O. 

J. S. Winslow, Portland, Me. 

George F. Easton, Pittsburg, Pa. 

C E. D. Meier, 421 Olive St., St 
\ Louis, Mo. 

C James M. Swank, Gen. Man., 
\ Philadelphia, Pa. 
John Jarrett, Pittsburg, Pa. 
Henry C. McLear, Wilmington, Del. 
( W.C. Brown, 4s La Salle St., Chi- 
\ cago, 111. 

E. P. Wilson, Cincinnati, O. 

James S. Burbank, New York. 

Frank Barry, Milwaukee, Wis. 
William H. Sayward, Boston, Mass. 
T. B. Laycock, Indianapolis, Ind. 

John Jarrett, Pittsburg, Pa. 

T. J. Hogan, Chicago, 111. 

S. N. D. North, Boston, Mass. 

W. R. Tucker, Philadelphia, Pa. 

A. Kennedy Child, Hartford, Conn, 
f Theo. A. Randall, 5 Monimient 
( Place, Indianapolis, Ind. 

Morris S. Wise, New York. 

C F. D. Seward, 525 North Main 

) St., St. Louis, Mo. 

D. W. WilLson, Elgin, 111. 

T. James Femley, 505 Commerce 

St., Philadelphia, Pa. 
( Genrge M. Verity, care American 
) Roofing Co., Cincinnati, O. 

Charles W. Baker, Chicago, 111. 

|. D. Van Ness Person, Chicago, 111. 

W. M. Crawford, Chicago, III. 
Hiram G. Janvrin, 9 Dock Square, 

Boston, Mass. 
illiam F. Kemper, St. Louis, Mo. 

George F. Stone, Chicago, 111. 

A. B. Merriam, Minneapolis, Minn. 

John Jarrett, Pittsburg, Pa. 

Richard Katzenmayer, New York. 

F. L. Alcott, Standard Lighting Co., 
Cleveland, Ohio. 

C R. R. Freeman, 95 Commercial 
} St., Boston, Mass. 



Exchange, the Board of Trade and Transportation, 
the Coal Exchange, the Mechanics' Exchange, and 
many more with names indicative of their trade spe- 
cialties, which have organized from time to time as 
the city developed. 

The approximate numbers of the various commer- 
cial associations located in the principal cities, not 
previously enumerated, are as follows : Philadelphia, 
20; Boston, 48; Pittsburg, ii ; Baltimore, 21 ; San 
Francisco, 1 5 ; IndianapoHs, 8 ; Louisville, 9 ; New 
Orleans, 1 1 ; Minneapolis, 1 2 ; Kansas City, 9 ; St. 
Louis, 26; Omaha, 9 ; Buffalo, 16; Cincinnati, 17; 
Cleveland, 9; Milwaukee, 10; and the entire num- 

Thus it will be seen that, starting with but four 
commercial organizations, of the character and scope 
outlined, at the beginning of the nineteenth century, 
their number at its close will have increased five 
hundred fold. What they have accomplished for 
the people of this country is simply incalculable. 
The record is found in our extensive manufactiuing 
industries ; in the products of the soil, forests, and 
mines ; in our enormous interstate commerce ; in 
our foreign trade ; in our circulating medium and 
monetary in.stitutions ; and, finally, in the unprece- 
dented increase in national wealth, prosperity, and 




INEVITABLE from the first as was the suprem- 
acy of New York in the commerce of the Western 
world, her preeminence to-day has largely been 
attained along the lines of her own endeavor. Com- 
peting in the open fields of enterprise and trade, she 
fairly won the wealth that has rendered possible the 
ever-increasing magnitude of her operations. Her 
later progress is linked to that of the nation by the 
double and indissoluble bond of cause and effect. 

To the geographical location of New York have 
been attributed, and to a certain extent justly, the 
great advantages she enjoys over every other city 
on the Atlantic seaboard. Her harbor is one of the 
largest and safest in the world. It is never closed 
by ice, and is always easy of access. Situated at 
the mouth of that great inland waterway, the Hud- 
son, the island of Manhattan affords a shore front 
capable of docking the navies of the world, while 
Long Island Sound, a miniature Mediterranean, 
stretches far away to the east. Great trunk-lines, 
tapping the vast resources of every part of the coun- 
try, bring here the products which are later distrib- 
uted over the whole habitable globe. This is the 
condition of affairs to-day ; but there was an era, 
prior to the railroads, when small vessels of far hghter 
draft demanded spacious harbors, and when, the 
manufacturing interests of the country being unde- 
veloped, natural products alone sought the markets 
of the world. 

This was the time, a century ago, when New York 
won her spurs. With a population of about 50,000, 
she held her claim to commercial and metropolitan 
honors only by contention. Philadelphia, Baltimore, 
New Orleans, and even Charleston represented in- 
terests as important as those which centered upon 
Manhattan Island. Cotton was then an infant 
monarch of little power, but the plantation interests 
of the South, which were striding daily into promi- 
nence, centered at Baltimore and Charleston ; the 
great highway of the Mississippi was already begin- 

ning to take the products of the West to New Or- 
leans ; while Philadelphia, with her great banking in- 
terests, and New England, with her flourishing West 
Indian trade, were further challenging New York. 
Of the total commerce of the country. New York 
had only about one fourth credited to her. Singu- 
larly enough, it differed but little in its import fea- 
tures from that of to-day. The causes of this are 
not hard to discover. The mercantile interests of 
the city were already developed. Her social life 
differed only in degree from that of the European 
capitals, and wealth and luxury were found every- 
where. The old aristocratic flavor of the colonial 
days still remained, and in politics alone was found 
the dominant democracy of the time. Gentlemen's 
cellars still nursed in dusty bins the choicest wines 
of sunny France, of Portugal, and of Madeira, which 
made the invoice of many an arriving merchantman. 
Olives, oil, dried fruits, and hundreds of other luxu- 
ries came from the Mediterranean ports, while coffee, 
sugar, spices, indigo, dyestuffs, and other tropical 
products arrived from the West Indies and from 
the Orient. Cloth and manufactured articles of 
all kinds for the use of New York were brought 
from England and France, and with the other 
imports were traded for the wheat, flour, corn, 
beef, fish, provisions, furs, lumber, and tobacco which 
our own country sent here for a market. Very little 
money, generally speaking, changed hands. Com- 
merce resembled more an extended application of 
the barter system of the early trading-post than an 
international business relation. 

To this brief resume of the situation as it pre- 
sented itself to the bewigged old gentlemen who 
gathered daily at the so-called Merchants' Exchange 
in the Tontine Coffee-House during the early days 
of the year 1795, only one thing remains to be 
added. This was the extreme insecurity of our 
commercial relations, which dashed the otherwise 
legitimate undertakings of our merchants with a 




speculative savor found to-day only in the stock 
market. England in 1783 was unable longer to 
withhold political liberty, but a dozen years later 
she still endeavored to hold on to many of the ma- 
terial advantages of colonial days. 

The first step toward removing the obstructions 
which embarrassed our commerce was the Jay 
treaty. The successful negotiation of this first of 
our commercial treaties, imperfect though it was, 
well deserves centennial celebration. It marks our 
admission as a nation into the world's fraternity of 

Many a famous fortune of to-day, and many a 
great business house since known all over the civ- 
ilized world, were founded in the next decade. At 
this time New York was scarcely half as large as 
Philadelphia. Its merchants, who to-day would be 
called importers, and its retail storekeepers, trans- 
acted the business of the town. There were no 
manufacturing interests, and even in 1800 this 
branch of industry had only reached an annual out- 
put of about $250,000, a large part of which was 
accredited to brewing and distilling. When it is 
considered that to-day New York's factories turn out 
annually over $600,000,000 worth of goods, the sig- 
nificance of the change from the condition in which 
they started will be better appreciated. 

The city of New York during this period extended 
only about to Reade Street or Duane Street, and 
above Canal Street was still the open country. The 
docks were in the southeastern part of the island, 
beginning at Whitehall Street and running around 
to Peck Slip. Above these, all along the shore, 
were the shipyards, which were the first to feel the 
impetus of the good times that were inaugurated in 
1795. Those were the days when a few hundred 
dollars built a stanch little vessel. Her hull was 
easily mortgaged for so much as would supply her 
with sails and rigging, and the profits of her first 
voyage to the West Indies were such that she would 
tie up to the home dock completely paid for. 
Through the activity of trade the ship-builder and 
the merchant prince reached a prominence never 
before gained by any class in the community. With 
the exception of the farmers, they were almost the 
only employers of labor. It was an age which, with 
all its simpHcity, affected a lavishness of hving ex- 
penditure, and these nabobs spent their money as 
freely as they made it. Their argosies came back 
to them laden with all the latest products of Euro- 
pean industry and skill. Their warehouses, filled 
to overflowing, poured into the empty holds of these 
vessels great cargoes of grain, breadstuffs, fish, and 

provisions, which were carried to Europe, laid waste 
by Napoleon and his French legions, and which 
brought fabulous prices. Return cargoes, sold at 
enormous profit here, still further added to the lu- 
crative nature of this early trade, and the merchants 
of New York improved their time to accumulate 
wealth without interruption until the Embargo of 
President Jefferson in 1807. 

In the mean time, however, many things were 
happening which were later to produce their effect 
upon the trade of New York. These causes had 
already begun to shape themselves in 1800. The 
population of the city was then 60,489, and it was 
distinctly commercial and maritime in its nature. 
The offices of the largest merchants, the three banks, 
the three insurance companies, and all the business 
energy of the city had centered about Wall Street, 
excepting the shops and smaller retail establishments, 
which lined Pearl Street, making it a main thorough- 
fare then and for thirty-five years thereafter. The 
coastwise and inland trade had brought to the docks 
sloops and quaint old craft in shoals from New Jer- 
sey, up the Hudson, and along the Sound, which 
brought firewood, brick, farm produce, and other 
articles, and took away general supplies. Further 
than this, a large fishing-fleet made this port its 
headquarters, and its season's catch, dried and 
salted, continued for many years to be an important 
part of our exports. 

Of manufactured articles, except the very coarsest 
grades, we produced almost none at that time ; but 
under the fostering of the Embargo and the war 
blockade there came a great manufacturing move- 
ment, which continued for a period of three years. 
In 1800 attempts were made for industrial indepen- 
dence in many branches. The iron-working indus- 
try, always prohibited by England to the colonies, 
was begun in a minor way in New York by such 
men as Robert McQueen, James P. Allaire, and 
others. Pianos, soon to become an essential in the 
drawing-rooms of all cultivated people, were among 
the earliest of American manufactures. Dodds & 
Claus, the first firm engaged in this business, were 
making them as early as 1792 at 66 Queen Street, 
now a part of Pearl. Besides this most important 
branch. New York's other industries were two or 
three hat factories, which employed a few hands at 
cheap wages, and several breweries, distilleries, and 
tanneries. The trade in furs, too, was extensive at 
this time, and John Jacob Astor soon after organ- 
ized a single company, with a capital, enormous for 
those days, of $1,000,000, the greater part of which 
was furnished by him. He further increased his 



operations a few years later by absorbing two other 
companies, and establishing a Western depot on the 
Columbia River. With the exception of this latter 
enterprise, which soon failed, his business was in 
New York. 

Europe during all this period was torn by the 
struggles of those national giants, France and Eng- 
land. Each of the combatants had proclaimed a 
blockade against all European ports except those 
under its own control, and any merchantman flying 
the United States flag was liable to confiscation, if 
caught by a patroling cruiser or privateer of either 
nation near the blockaded coast. Many ships were 
lost in this way ; but the enormous profits gained 
when a vessel managed to slip a cargo through were 
so tempting that New York merchants continued to 
embark in such ventures. It was at this time that, 
protest having proved unavailing. President Jefferson 
believed himself to have found a way to force the 
belligerent powers to respect the neutrality rights of 
America. To this end he issued in 1807 his Em- 
bargo, prohibiting all American merchantmen from 
leaving port, and forbidding the shipment of Ameri- 
can cargoes in foreign bottoms. It was his belief 
that Europe's need of the provisions this country 
supplied would drive her to conciliation. In this 
idea he proved mistaken, and the Embargo was 
necessarily repealed in 1809. It had, however, 
accomplished great mischief to New York's com- 
merce, as well as to that of the country at large. 
The great fleets of the merchant princes lay rotting 
at their anchorages. The warehouses were deserted, 
and grass grew upon the unused docks. Many 
clerks were discharged, and their poverty, together 
with that of hundreds of sailors thrown out of em- 
ployment, made the suffering among the laboring 
class severely felt. 

The most important event of this time, however, 
and one that far outranks the Embargo in its con- 
tinuing importance, was the building by Robert 
Fulton of the Clermont, the first steamboat, though 
it was little more than a toy. He was aided with 
means by Chancellor Livingston. At a speed of 
between four and five miles an hour the little vessel 
made the trip to Albany and return, thus inaugurat- 
ing the present era of steam-navigation. She was 
speedily followed by others. Steamboats were run- 
ning on Long Island Sound in 1818, and the fol- 
lowing year John C. Stevens, of Hoboken, built 
the steamer Savannah, of 380 tons, which was the 
first steam-vessel to cross the Atlantic. Ten years 
later there were fifty steam-packets running into 
New York harbor, and in 1840 the first regular 

transatlantic steamers were started by the Cunard 

The repeal of the Embargo in 1809 had scarcely 
time to bring about any great results before the War 
of 181 2 ; and an immediate blockade by a British 
fleet of the port of New York again locked up the 
city within the narrowest limits, even her coastwise 
trade being stopped. Much distress resulted in the 
winter from the lack of firewood ordinarily brought 
by the Jersey sloops. The blockade, too, had an 
added severity over the Embargo, in the fact that, 
being a community dependent upon England for 
goods, we were suddenly cut off from our supply, 
and found ourselves without means at home to rem- 
edy the deficiency. Then it was that the attention 
of New York was for the first time turned seriously 
toward manufacturing. Homespun, although worn 
in the country at large, would scarcely do for the 
fashionable people in New York ; and all the hundred 
and one conveniences demanded by dwellers in 
city and country must be supplied. In response to 
this demand factories sprang up as if by magic. 
Especially wonderful was the sudden growth when 
it is considered that there was not a shop in the 
country then capable of turning out anything but 
the simplest machinery. Despite all adverse condi- 
tions, industries multiplied and prospered. Ameri- 
can wool, which had hitherto been supposed only 
fit for the coarsest kinds of cloth, was successfully 
used for the manufacture of finer fabrics. The first 
woolen-mills, owing their origin to the pressure at 
this epoch, were started in 1809, and during the war 
turned out satinet which sold at $4 per yard, and 
broadcloth which brought from $10 to $12 per yard. 
In this, as in the majority of other lines, prices were 
abnormally high, and the manufacturers made much 
money. Cotton-mills were also started. Many em- 
barked in the new ventures, and nearly every kind 
of manufacturing was represented. When the war 
ended prosperity departed as suddenly as it had 
come. England, in her desire to regain her former 
market, poured in her goods at prices far below 
those at which the New York manufacturer could 
afford to sell his products, and forced him to shut 
his doors. Tens of thousands of dollars of lost capi- 
tal, and hundreds of operatives out of work, made 
up the result of New York's first effort to enter the 
ranks of the world's producers. It was not alto- 
gether a dead loss, though, for a spirit had been 
roused which continually manifested itself during 
the next twenty years, and which eventually placed 
this city high in the list of manufacturing centers. 

With the return of peace, Messrs. Adams, Galla- 



tin, and Clay went to England, where on July 3, 
181 5, a commercial convention was negotiated, 
copied substantially from Jay's treaty, but with an 
added proviso for absolute reciprocity in direct trade 
by the abolition on both sides of all discrimination. 
This convention was ratified December 2 2d. Con- 
fidence was seriously checked by the financial and 
industrial depression which followed the war, but 
New York was among the earliest cities to rally and 
continue her enterprises. By far the most impor- 
tant of these was the proposed Erie Canal. It con- 
templated the connection of the Hudson River and 
the Great Lakes, thereby bringing to New York the 
wealth of products of the great inland basin thus 
reached. Ground was broken in the work of dig- 
ging the great canal by James Richardson, on July 
3, 181 7, near Rome, N. Y. Eight years were re- 
quired for the completion of the task. On Novem- 
ber 4, 1 82 5, the first fleet of canal-boats came through 
from Buffalo to New York City, Governor De Witt 
Clinton, who in the face of almost insurmountable 
obstacles had carried the work through, being in the 
first boat. The event was celebrated in New York 
with the greatest enthusiasm, and marked the com- 
mencement of the system of communication since 
established both by rail and water with the interior 
of the country. 

As Governor CHnton and the few far-sighted men 
who had supported him in his giant undertaking 
had foreseen, the new canal began at once to revo- 
lutionize the internal trade of America. By it New 
York was able to reach, cheaply and quickly, dis- 
tricts which had hitherto been accessible only by a 
long and circuitous route around Florida, through 
the Gulf, and up the Mississippi River. The Erie 
Canal afforded to New York what she then most 
needed — an opportunity to extend her domestic dis- 
tribution and collection. It was the first move made 
for the protection of this city against the prosperous 
factors of New Orleans, to whose doors the great 
Mississippi was bearing in daily increasing numbers 
the huge flat-bottomed river-boats laden with the 
products of the West. Many States, like Ohio, In- 
diana, and Illinois, were in the habit of sending their 
products to New Orleans for export, although ob- 
taining their supphes and imports from New York. 
The canal put all these localities in closer touch 
with the great seaboard city, and paved the way as 
nothing else could have done for railroad transpor- 
tation facilities, when their turn came, a few years 

Meantime the commerce of New York continued 
to flourish. Packet lines with regular weekly sail- 

ings were established, the first being the Blackball 
Line, founded in 18 16 by Isaac Wright & Son, Fran- 
cis Thompson, Benjamin Marshall, and Jeremiah 
Thompson. It was followed by the Red Star Line, 
organized by Trimble & Company, in 1821; the 
Havre packets of Depau, in 1822; Grinnell, Min- 
turn & Company's London Line, in 1823 ; and the 
China and California packets of Low, Griswold & 
Aspinwall, still later. The first of these lines, with 
its regular sailing-days, began the systematizing of 
transatlantic trade ; and the imports to New York 
during the ten years following 1820 increased nearly 
$8,000,000, while the export trade made a corre- 
sponding gain, the total imports and exports of the 
country in 1830 amounting to $144,776,428. Two 
years later the $10,000,000 which New York had 
put into the great ditch of the Erie Canal was show- 
ing its fullest results. With a registered and enrolled 
tonnage of 286,438, — greater than Liverpool or 
any city in the world except London, — the harbor of 
New York was daily thronged with vessels. Either 
discharging at the docks — which had by this time 
stretched themselves around to the North River 
front — or at anchor in the stream, over 500 vessels 
could be counted any day in the year. From for- 
eign ports nearly 2000 vessels arrived annually, while 
twice and a half that number, engaged in the coast- 
wise trade, ran in and out in the same time. From 
the invoices of all these craft could be read the story 
of a volume of trade of dimensions hitherto unprec- 
edented. The amount New York paid as valuation 
of her imports in 1832 was $53,214,402, while the 
total for the rest of the country reached only $47,- 
815,864. By these figures it will be seen that New 
York's percentage in duties would easily make her 
the chief contributor to the revenues of the govern- 
ment, as she was and always has been. Of the im- 
ports of that time, manufactured articles, fully fifty 
per cent, of which were dry-goods, made the great 
bulk. Besides the silks, woolens, cotton goods, and 
linen, hardware, cutlery, earthenware, and workings 
of brass and copper, together with the wines and 
spirits which England and France supplied, there 
was a large and flourishing trade with Brazil and 
the West Indies in sugar, molasses, and coffee, and 
with the Orient in tea, spices, indigo, dyestuffs, and 
other tropical products. 

The exports from New York during this same 
year reached the amount of $26,000,945, or between 
one fourth and one third of the total exports of the 
country. The prominence of New Orleans as a 
port of the West explains the discrepancy between 
in and out volume of trade of New York, which dis- 



crepancy, in fact, existed more or less markedly up 
to the time of the railroads. The exports most im- 
portant at that time were wheat, flour, corn, rice, 
beef, pork, buttej, dried fish, general provisions, furs, 
tobacco, and lumber, together with some of the 
coarser grades of manufactured goods. In this list 
the manufacturing progress of the city since the dis- 
astrous setback that followed the War of 1812 is 
plainly shown. Soap, boots and shoes, furniture, 
carriages, trunks and leatherwork, hats, cordage, 
earthen and stone ware, drugs, and rough ironwork 
were all being turned out, and in quantity sufficient 
to warrant exportation in many of the lines enumer- 
ated. There were also paper-mills, type-foundries, 
printing-press manufacturers, and large flouring and 
tanning interests centered here. 

The prosperity of this time, commercial and finan- 
cial, was rudely broken in upon three years later by 
the great fire which occurred on the night of Decem- 
ber 16, 1835, in Merchant Street, and which, after 
raging three days, was finally extinguished only by 
blowing up a number of houses with gunpowder, 
thus leaving a vacant space that the flames could 
not pass. It had destroyed, however, nearly the 
whole of the business section. In and around Han- 
over Square, Pearl and Wall streets, 648 houses and 
stores were burned, together with contents valued 
at $18,000,000. The blow was a terrible one, and 
the insurance companies of the city succumbed at 
once. Scarcely one survived. Business of every sort 
had been affected, and in the severe winter weather 
that prevailed, building had to be delayed and many 
interests found themselves homeless. To the de- 
pression of this great conflagration can be traced 
many of the active causes of the financial panic 
which broke over the city and country in 1837, and 
for a time darkened the whole commercial horizon. 

As in the past, however. New York was one of the 
first to feel better times. The country was growing 
fast and demanded hundreds of articles for which 
New York was the distributing point. Ohio, Indi- 
ana, and Illinois had undertaken canals connecting 
the Ohio and Mississippi rivers with the Great Lakes 
at Cleveland, Toledo, and Chicago ; but with all these 
increased activities elsewhere New York had main- 
tained its position as the great port of entry. Bal- 
timore's attempt to accomplish a connection with 
the West by the Baltimore and Ohio Railroad in 
1828 did not prove immediately valuable when com- 
pleted, and Philadelphia, with the other seaboard 
cities, still found the lofty walls of the AUeghanies 
an insurmountable obstacle. Railroads were in op- 
eration, but only in unconnected lengths, and trunk- 

lines were still in the future. The telegraph, des- 
tined in its later applications to revolutionize the 
commercial methods of the world, was discovered 
by Professor Morse in New York, and a line— the 
first — was built between this city and Philadelphia 
in 1845. A setback caused by another great fire 
in this same year (1845), which destroyed nearly 
$8,000,000 of property, was speedily passed over. 
The railroads were surely, if slowly, increasing and 
improving. The trade in the China seas and with 
India was extending, and despite its great risks 
many houses were growing rich and powerful in its 
pursuit. Manufacturing had increased to a point 
where the permanency of its institution could no 
longer be doubted. The boundless resources of the 
great Western granaries were poiu-ing in yellow 
streams to Europe. The Collins Line of steamers, 
with five magnificent ships subsidized by the United 
States government, were put upon the Atlantic 
Ocean ; but the loss of the Pacific and Arctic, fol- 
lowed by the withdrawal of the subsidy, ended the 
operations of the line in 1858. 

The event of this period, so far as New York's 
commercial greatness is concerned, however, was 
the opening of the first trunk-Hne, the Erie, to Dun- 
kirk, in 1 85 1. It demonstrated the usefulness of the 
railroad, doubted even at that day by many, and 
was speedily followed by other great systems stretch- 
ing out in all directions. Long before this first road 
was finished New York's position as the metropolis 
of the United States was assured ; but its connection 
with railroads of sufficient length was as important 
to it as the opening of the Erie Canal had been 
twenty-five years before. The commercial interests, 
which had originated, developed, and supported the 
city's greatness, began still further to expand. The 
financial troubles of 1857 found New York the least 
susceptible to their attack. It .speedily recovered, 
and the next year saw the commerce of the country 
reach a total valuation of over $500,000,000, of 
which only about two fifths was accredited to New 
York, despite the fact that nearly two thirds of the 
imports, amounting to $180,953,843, had passed 
through her custom-house. The preeminence of 
New Orleans in the cotton export trade still con- 
tinued to keep that city on terms of formidable riv- 
alry with New York, while Galveston, also deriving 
its importance from the same staple, was coming to 
the front with Baltimore, Savannah, and Charleston. 

This year of 1858 was destined to see one of the 
most marvelous of the century's achievements — the 
laying of the first transatlantic cable, which was ac- 
complished through the enterprise of several of New 



York's public-spirited citizens. Though it operated 
successfully for only a few days, its practicability 
was demonstrated, and 1865 and 1866 saw others 
laid and the present great oceanic system of tele- 
graphs begun. 

The brief operation of the cable of 1858 furnished 
one striking incident of the utmost commercial im- 
portance. Over it was announced the collision be- 
tween the steamers Europa and Arabia, the recep- 
tion of this news saving the business world at least 
$250,000, which would otherwise have been spent 
in additional insurances on the vessels and their 

In 1859 the country at large owned a total ton- 
nage of 3,485,266, — greater than that of any or all 
nations on earth except the United Kingdom, — while 
New York herself alone had a tonnage greater than 
any of the other countries, with the exception of 
Great Britain. This great fleet, carrying the chief 
part of all America's commerce under her own flag, 
was also strong in her competition for the carrying 
trade of the world, the lion's share of which she had 
already won. In the coastwise trade an enrolled 
and licensed tonnage of 1,377,424 plied to and from 
New York harbor. 

The period comprised by the next few years is 
one which lends itself to be told by figures more 
readily than in any other way. The growing net- 
work of the railroads had been slowly diverting the 
cotton from the smaller seaports in its movement to 
the markets, and New York was now getting a fair 
share. Her total imports for the year 1861, preced- 
ing the Civil War, amounted to $188,790,086, out 
of $287,250,542 credited to the country as a whole. 
Of the exports, of the value of $204,899,606, New 
York had more than doubled the figures of three 
years earlier, and claimed $118,267,177. The ton- 
nage of the country had swelled to the vast total 
of 5,299,175, and merchantmen carrying the Stars 
and Stripes and hailing from New York could be 
seen in every port of the civilized world. It was 
the golden age of American shipping ; and although 
New York is a far greater city to-day than she was 
then, it is still a matter of regret that she cannot 
carry on her vast transactions with an American 
marine, rather than beneath the flags of other coun- 
tries whose vessels traverse the seas. The golden 
age was brief, however. It grew up in the years be- 
tween 1820 and i860, and it was cut down almost 
in a year — one year of war. The close of 1862 
found the United States' merchant fleet smaller by 
many thousands of tons than it had been the pre- 
ceding year, while Great Britain, ever on the watch 

to secure an advantage, had increased her fleet cor- 
respondingly and was rapidly becoming the carrier 
of the world's freights. 

The imports at New York showed still further the 
effects of the war. A falling off of over $50,000,000 
was the record, but even this was far better than 
that which happened to the remainder of the coun- 
try, which added up its total import trade to only 
$189,356,677. The export trade of the country at 
large was affected least by the troubles of this time 
and only decreased slightly, while New York's ex- 
ports actually increased, amounting to $1 27,651,778, 
or about $9,000,000 more than during the preced- 
ing year. The cause of this was shown later in the 
year following the war, when between the exports of 
New York for 1864 and those for 1866 there was a 
falling off in the latter year of nearly $33,000,000, 
due mainly to the resumption of the Southern ports. 

The effect of the Civil War upon New York's 
commerce fortunately lasted only a short time. 
Had it not been for the disturbance it caused to 
general business it is doubtful whether the war, in 
its effect commercially, would not have been con- 
sidered to a high degree beneficial. The figures, 
when studied, show this to have been so relatively, 
at least. New York was undoubtedly more promi- 
nent and a larger factor in the trade of the country 
between i86i and 1864 than she is now, but it was 
a much smaller trade. Her own particular pros- 
perity increased with the end of the war, and in 
1870 her imports and exports had increased to over 
$100,000,000 greater than they were in 1862, while 
the total trade of the United States aggregated nearly 

The foregoing figures show that the commerce of 
New York recovered very quickly from the shock of 
war. The shipping interests of the city were not so 
fortunate. Out of a total lost tonnage of 1,104,435 
due to the war, New York had suffered about one 
fifth of the whole. This loss has been recovered 
but slowly, and even to-day the figures have not re- 
turned to the point from which they fell. Instead 
of two thirds of the commerce of the port being 
done in American bottoms, as it was prior to i860, 
there is scarcely a quarter of it that does not go to 
foreign carriers. England has nearly 8,000,000 of 
tonnage more to-day than we, and much of New 
York's trade is carried on under her flag. Ship-build- 
ing has accordingly ceased to be a great New York 
industry, which it was earlier in the century. 

Since the war all attempt to particularize in sketch- 
ing the history of such a gigantic emporium as New 
York is hopeless. The causes which have already 

Horace Porter. 



been laid down as operating to bring about her 
greatness are equally strong to maintain it. The 
natural center of the enormous wealth of the East- 
ern seaboard States, she is also in direct contact by 
her railroads and waterways with the most remote 
centers of production, and to her as the only real 
distributer must the imports come. Despite the 
fact that storage and wharfage charges are higher 
than in almost any other port, one third of the entire 
wheat crop of the country is exported from this city. 
The war and the railway systems together have so 
militated against the Southern cotton ports that a 
large share of that trade passes through New York. 
Petroleum and the valuable products of the won- 
derful oil regions, dressed beef and pork from the 
enormous packing-houses of Chicago and other 
Western cities, live cattle from Texas and the 
Western plains, and breadstuffs and provisions of 
all kinds, make up much of the great volume of 
exports. Of the staples of import, among the most 
important are sugar, coffee, tea, and tobacco. Of 
these, one half the sugar and three fourths each of 
the coffee and tea imported for the whole country 
pay duty at this port. 

To show more clearly the magnitude of the busi- 
ness transactions involved in the commercial state- 
ments of to-day, a few figures taken from the best 
available sources will be useful. The year 1885 
gave a total volume of commerce for the United 
States of $1,304,210,275. New York's returns for 
the same period showed imports amounting to $380,- 
077,748 and exports $334,718,227, making a total 
of $714,795,975. In 1893, in the face of the finan- 
cial and commercial troubles of the year, the coun- 
try's total foreign trade showed an increase of nearly 
$350,000,000, making a total of $1,652,354,534. 
New York's share in the nation's increased trade 
was about $170,000,000, her total figures for the 
year being $886,487,641. 

To meet the demands of the enormous traffic in- 
dicated by these figures. New York has expanded 
in every way. It now has 'a population of about 
2,000,000, and manufacturing interests with an an- 
nual productivity of $600,000,000 and employing 
500,000 hands. It is a center for the greatest 
railways of the country, and a sailing port for half 
a hundred great ocean steamship lines. It has a 
water-front of twenty-five miles, thirteen of them 
being along the North River, and the dock facilities 
are increasing every day. The recently completed 
Harlem Canal between the Harlem and Hudson 
rivers has been put into operation, and with its facil- 
ities the great coastwise trade in bricks, ice, and 

lumber between New England and the Sound ports 
and the Hudson River towns has been materially 
increased, and a saving of many miles accomplished 
for a number of vessels coming in on one side of 
Manhattan Island and having to discharge on the 
other side. 

The harbor of New York to-day is thronged with 
vessels the year round. Lofty-masted sailing fleets 
are docked along South Street ; coastwise vessels 
and freight and passenger transatlantic steamships 
stretch for miles along West Street, interspersed with 
slips for market-boats and fishing craft ; while count- 
less ferries furnish a connection with neighboring 
cities. 5,000,000 annual tonnage is computed to be 
the extent of the city's shipping traffic, and 928,000 
of this is in the foreign trade, the coastwise trade 
with its colliers, and the fleet of New England schoon- 
ers, making a large percentage of the remainder. 
A total of about 6000 vessels, steam and sail, 
arrive here annually from foreign ports, while nearly 
16,000 enter in the coastwise trade, of which fully 
14,000 are sailing craft. In addition to the Euro- 
pean lines there are regular steamships to Brazil, 
Venezuela, the Central American and Mexican ports, 
and the West Indian Islands. 

The precautions taken to guard the city from 
contagion from any of the increasing number of 
merchantmen have resulted in the establishment of 
an effective quarantine. Originally instituted in 
1746 on Staten Island, moved to Bedloe's Island 
in 1784 by the State legislature, and to Governor's 
Island in 1794, it returned finally to Staten Island 
in 1 80 1, where its usefulness has steadily increased. 
The immigration in this country centers almost en- 
tirely in New York, over four fifths of the total tide 
coming to Ellis Island. 

The mercantile interests of the city have likewise 
increased with the general expansion, until to-day 
there is scarcely a great interest in the country which 
has not agents in New York. Foreign houses also 
have established branches here, and the old mer- 
chant of one hundred years ago has become the 
great importer of to-day, while his jealously guarded 
designation of "merchant" has fallen upon the 
modern business man, jobber, wholesale dealer, and 
manufacturing agent. 

Diversified as the commercial lines have become, 
the growth to separate importance of the various 
branches with their ramifications has compelled the 
introduction of new methods. The Chamber of 
Commerce and the Board of Trade and Transpor- 
tation constitute bodies as great and productive of 
good as ever, but around them have grown up many 



subdivisions of the various interests. A single trade 
to-day transacts a greater business than the com- 
bined interests of the whole city did one hundred years 
ago, and some facilitation of this enormous business 
became necessary. This has resulted in the estab- 
lishment of many exchanges, such as the Produce, 
Cotton, Coffee, Coal, Metal, Consolidated, Fruit, 
Real Estate, and others, all of which concentrate 
the interests they represent at some commercial 
point. The shipping interests are represented at the 
Maritime Exchange, and the facilities of the cus- 
tom-house, public stores, and bonded warehouses are 
such as have been found to be of the greatest prac- 
tical benefit. There are 1700 employees in the cus- 
toms service in New York; and $150,000,000, col- 
lected at the modest cost of about two per cent., is 
the annual revenue this port contributes to the Fed- 
eral government. 

Summing up the whole situation, New York to- 
day as a commercial metropolis outranks any city 
in the world, with the single exception of London ; 
and it requires no especially boastful spirit to say 
that her prosperity is founded upon a securer basis 
than that of even the great English capital. Stand- 
ing at the national gateway to the great West, the 
wealth that pours each way must pass through her 
portals. Combining the enterprise that attempts 
with the wealth that makes of the attempt a sus- 
tained effort, she has only begun her career of great- 
ness. She has won success in the first and hardest 
stage of her journey, and the way is now clear be- 
fore her. Her future is secure, for as surely as the 
nation shall wax greater, richer, and more powerful, 
so surely shall the metropohs of New York continue 
her onward progress. 



DIFFERENT conditions of soil, climate, and 
population exist throughout the world, so that 
a large portion of the wants of one section is 
supplied from the products of another. This inter- 
change is the most important agency for bringing 
the peoples of the world into harmonious relations. 
By its means the interests of different regions have 
become so interwoven that to-day no nation can go 
to war without seriously prejudicing the interests of 
neutral countries as well as those of many of its own 
citizens. With improved methods of production, and 
the increased facilities for interchange of commodi- 
ties, the wants of mankind have rapidly grown. The 
luxuries of one generation have become the necessi- 
ties of the next, so that to-day the masses are living 
under more favored conditions than the nobility of 
medieval times, and international trade has increased 
fortyfold since the beginning of the eighteenth 

The most important developments of this " indus- 
trial age " are the railroad, the steamship, and the 
telegraph. They have made possible the transporta- 
tion of merchandise of great bulk under conditions 
generally beneficial to both producers and con- 
sumers. Foreign trade has become to-day of so 
much importance that the leading men of all nations 
are alive to the necessity of mastering the complex 
conditions governing international commerce, and 
he takes the highest place in this age of industrial 
wars who is most prominent in creating conditions 
favorable to the industrial development of the people 
he represents. 

In looking at these rapidly changing conditions 
from a trader's standpoint, one fact stands out, that 
while the volume of foreign trade has increased, 
the margin of profit has proportionately decreased. 
The barter of tinsel trinkets, firearms, and spirits for 
ivory, pearls, and gold-dust showed such an enor- 
mous percentage of profit as to illustrate the igno- 
rance which existed under primitive means of com- 

munication. As facilities for communication and 
transportation improved, rates of freight declined, 
widening the circle of trade. During the first three 
quarters of this century the margins of profit in 
foreign commerce were so large that merchants with 
only moderate capital entered the field successfully, 
and there grew up in the maritime cities and towns 
of this country a well-distributed business in foreign 
trade and in the building and freighting of sailing 
vessels until we possessed the finest fleet of clipper- 
ships in the world. 

During the past twenty-five years, however, the 
margins of profit in foreign trade and transportation 
have been reduced at least seventy-five per cent. 
New methods have been adopted in order to suc- 
cessfully meet these new conditions. Most of the 
houses that were leaders in our foreign trade one 
quarter of a century ago did not adapt themselves 
to the changed environment of commerce, and were 
forced out of business. To-day quick communica- 
tion and improved banking facilities enable the 
foreign merchant to transact safely a much larger 
business in proportion to his capital than was pos- 
sible half a century ago ; but these very facilities 
have created a competition so intense that to-day 
there is little or no profit in transferring the great 
staples from producer to consumer, so that the trader 
is forced into the position of a speculator unless he 
has special facilities for distribution. While in for- 
eign trade the middleman is more useful than in 
domestic commerce, the tendency of the times is, by 
bringing together producer and consumer, to elimi- 
nate him. The trader is forced to enlarge the field 
of his transactions. This he cannot safely do except 
by the use of expert abilities and scientific organiza- 
tion. All this makes necessary large aggregations 
of capital ; and the tendency to consolidation, which 
is the striking feature of industrial enterprise, is find- 
ing its way into international commerce. 

Yet the trader has a great advantage over the 




farmer and the manufacturer, for his capital is mobile, 
and not locked up in land or in machinery that in most 
factories must be thrown away within a decade by 
reason of new inventions. The Bessemer-steel rail and 
the triple-expansion engine have practically placed 
the wheat-fields of India, the Argentine Republic, 
and the western United States alongside the farms of 
western Europe. The cheap land and cheap labor of 
India, the natural advantages of the Argentine, and 
the great machine-reaped prairies of the West have 
destroyed the profit of the European tiller of the 
soil, and practically extinguished the margin for the 
landed proprietor. The great discontent in Europe 
to-day is largely due to the unfavorable condition 
of the agrarian classes; and the demand made by 
them for something to better their condition has 
forced to the surface the agitation of false theories 
for improving trade through silver legislation. 

The statistician Mulhall has made it possible to 
know what the trade of the world has been, and to 
trace year by year its enormous growth. The fol- 
lowing table shows approximately the aggregate 
value of imports and exports of each country in 
millions sterling : 

great force of the nation has been directed toward 
the development of our internal resources ; to inter- 
state commerce rather than to the extension of for- 
eign trade. The largest commerce of the world, 
conducted under the conditions of absolute free 
trade, is carried on between the States of the United 
States. Untrammeled by customs-duties, the people 
of the United States, covering a territory of 3,000,- 
000 square miles, have created the most efficient 
systems for exchange of commodities. They have 
built 185,000 miles of railways — as many miles as 
exist in all the rest of the world. They have created 
the most complete systems of navigation by lake, 
river, and canal, and a banking system by which a uni- 
form and stable currency exists throughout the entire 
country. They have not only opened up mines and 
extended agriculture, but they have developed man- 
ufacturing ; and while the rate of wages has been 
higher in this than in any other country, the people 
of the United States, forced by necessity to meet the 
low-priced labor of other countries, have applied 
their high intelligence to the invention of labor- 
saving machines, so that to-day, although the popu- 
lation of the United States is but 70,000,000, the 



Great Britain 









Holland and Belgium 


Turkey, etc 


United States 

Spanish America. . . . 

British colonies 



The world 

















































































































































From this general view of international trade let us 
turn to the foreign trade of the United States. I am 
informed that Mr. Worthington C. Ford in his con- 
tribution to this history of American Commerce, 
will give in detail the statistics of our imports and 
exports. Although the foreign trade of the United 
States has increased so that we now do as much in 
one week as we did in one year a century ago, the 

labor-saving machinery which is run daily in this 
country — its fixed steam power being one third of 
that of the entire world — has a far greater produc- 
tive capacity than the population of the Chinese 

The restless enterprise of America, having con- 
quered more than half the continent, it is now turn- 
ing toward other fields of activity. In the effort to 

Charles R. Flint. 



extend our commerce it is natural first to consider 
the countries south of us. These countries can buy 
of us manufactures and food products. Their prin- 
cipal employment is agriculture, and they form one 
of the most important groups of those nations which 
are known to economists as "neutral markets." 
There are many evidences of the strength of the 
movement toward enlarging our commercial rela- 
tions with these sister republics: the assembhng of 
the International American Conference, at which 
all the repubhcs of the Americas were represented, 
called under an act of our Congress for the piu:- 
pose of extending inter- American trade; the com- 
pletion by an American company of telegraphic 
communication by land and sea to the southern- 
most cities of South America ; the appointment of a 
commission, with representatives from North, South, 
and Central America, to report the most desirable 
route for an intercontinental railway ; the establish- 
ment of the Bureau of American Republics, for the 
purpose of publishing their statistics and other in- 
formation of interest to those engaged in American 
trade ; the simplification and unification of customs 
regulations ; a Monetary Conference to study plans 
for facilitating inter- American exchange ; the unani- 
mous recommendation by all of the American re- 
publics to establish an International American Bank 
under an act of the Congress of the United States, 
with branches in all the other American republics ; 
the celebration of treaties of reciprocity; the pro- 
posed establishment of a permanent court to settle 
all inter- American disputes by arbitration ; the open- 
ing to our southern neighbors of this great consum- 
ing market by continuing the free admission into 
the United States of hides, rubber, nitrate of soda, 
and other products, and the recent removal of the 
duties on coffee, sugar, and wool, so that to-day over 
ninety-five per cent, of the products imported from 
Mexico, the West Indies, South and Central America, 
amounting to $235,000,000, are admitted by us free 
of duty. Important as these have been, of still more 
efficiency is the incessant activity of American mer- 
chants and manufacturers who are engaged in press- 
ing their wares upon the attention of these most 
excellent customers. 

The merchant engaged in foreign trade is obliged 
to study not only the conditions of the markets which 
are the distributing points of products, but he must 
also investigate the conditions of production. The 
American system of manufacturing great quanti- 
ties of articles all precisely alike is favorable to uni- 
form quality at the lowest cost. This cost is still 
further decreased when manufacture is highly con- 

centrated. As a result many great industries are 
availing themselves of the advantages of centraliza- 
tion, and so securing economies. The first important 
aggregation in capital and intelligence for the pur- 
pose of securing cheap production was the Standard 
Oil Company, and they show what may be accom- 
plished by economical methods in building up a great 
foreign trade. Without assistance from tariff pro- 
tection that great combination has reduced the cost 
of illuminating oil to a point where it has been able 
to furnish a brilliant but low-priced light even to the 
countries where the people are the poorest and de- 
mand the lowest price, such as China, Japan, and 
India. The aggregate of these exports has reached 
the enormous sum of $45,000,000 per annum. The 
underlying principles which have created this great 
success are now being applied to many other in- 
dustries. Through these consolidations the capacity 
for cheap production is greatly increased, and such 
concentration of capital and industry will be a great 
lever in enabling the United States to take possession 
of foreign markets that heretofore have been domin- 
ated by competing nations. 

In labor-saving machinery and in intelligence of 
the labor employed, the United States to-day is 
in advance of the rest of the world. As an evi- 
dence of the progress we are making as a manu- 
facturing nation our exports of manufactures this 
year will amount to about $200,000,000 as against 
$40,000,000 in i860. While oiu* merchant marine 
has relatively declined, the fleets of other nations 
are at our service. But in one respect we are 
far behind the manufactiu-ing nations of Europe. 
Our banking system was organized originally with 
a view to enable the government to borrow great 
sums of money from the people during the Civil 
War by seUing bonds to be used as a basis for 
circulation. It has since been modified, and is 
to-day a most excellent instrument of interstate 
commerce ; but it is utterly inadequate to deal with 
foreign trade. The banking facilities of Great 
Britain devoted exclusively to the foreign commerce 
of that country represent an investment of hundreds 
of millions of pounds sterling, while the foreign 
merchants of the United States are forced to not 
only be their own traders, but their own bankers. 
Yet the advantages of foreign trade are great, and 
when the attention of the financiers of the countr)' 
shall be directed to the organization of proper institu- 
tions devoted to supplying this deficiency, the effect 
upon the increase of American exports will be marked. 

Such are the conditions of the past and of to- 
day from the trader's standpoint ; yet he may look 



toward the future with equanimity. While there is 
a tendency to eliminate the middleman, neverthe- 
less, if he be one of those fittest that are to survive, 
he will greatly increase his capital. He will perfect 
his organization so that he is ably represented in 
every market where he attempts to do business. 
He will freely use the cable to put himself in pos- 
session of all the price-making facts. He will 
assist in the formation of banking organizations 
which will enable him to finance his operations. 
While the average profit of transactions is steadily 
decreasing, he may so increase their volume and 
decrease the expenses of doing business that the net 
profits shall be as large as or larger than before. 
Then the rapid advance of America into the field of 
international trade will almost push him forward 
into prosperity, for the skill and knowledge acquired 
through long years of business relations with foreign 
markets must be availed of by the manufacturers 
and producers who wish to sell their goods abroad. 
By reason of superior organization he is able to per- 
fectly protect himself with reference to the standing 
and credit of his customers, and through his large 
capital he is enabled to spread his transactions over 
so many countries as to greatly divide his risks. By 
associating himself with the many movements to- 
ward concentration of capital and consolidation of 
production he will be able more readily to defeat 
his European rivals in the markets of the world. 
He will do all that he can to forward such enter- 
prises as the Nicaragua Canal and the Interconti- 
nental Railroad, which, while in a sense yet dreams, 
are dreams in course of realization. By means of 
these agencies certain disadvantages of the United 
States in the struggle for the world's trade will be 
more than counterbalanced, and the trader will be 
brought far nearer than before to the many regions 
with which he desires to do business. 

During the past ten years the foreign trader has 
been most seriously prejudiced by the violent fluc- 
tuations and uncertainty arising out of the unwise 
attempts to create an artificial value for silver. 
Through legislation the price of silver was advanced 
to $1.20 per ounce, but speedily reacted to less than 
sixty cents. While these conditions, because under- 
mining confidence, caused the panic of 1893, the 
trading in this country, owing to the government 
sustaining the stability of its currency, had the ad- 
vantage of being conducted upon a fixed basis ; but 
the trade of our sister republics and of the other 
countries on a silver basis was directly subject to the 
rapid fluctuations in the white metal. Importers were 
obligated to remit in gold, and then, owing to the de- 
preciation of the currency, had to take fifty cents on 
the dollar. These conditions doubled the prices of 
imports, thus curtailing the volume of importations. 
No conditions have ever arisen which have so 
obstructed foreign trade. False hopes of relief were 
based upon efforts to formulate an international 
agreement fixing a uniform ratio between gold and 
silver. Fortunately the silver question, after several 
campaigns of education, is better understood, and 
this vexed problem is in course of solution by natural 
laws. Low prices are reducing the production of 
silver, while the output of gold is rapidly increasing. 
No business has been so seriously affected by the 
uncertainty and extreme fluctuations in the price of 
silver as international trade, and probably none will 
benefit so much by stable monetary conditions. Our 
foreign trade is already beginning to feel the effect 
of greater financial stability. The power of return- 
ing confidence, with the accumulated energy of years 
of inactivity, multiplied by the modern facilities for 
production and transportation, will create an era of 
prosperity in international trade unknown in the 
history of the world. 



THE name "Wall Street" is but a symbol 
used to signify the American money market. 
As the dollar-mark placed before long rows 
of figures throws a golden luster on the column, so 
the name of the little great thoroughfare that runs 
from the high gate of old Trinity down to the East 
River lends its own significance to the surrounding 
locality. Nassau, Pine, Cedar, Broad, New, Wil- 
liam, and Hanover streets are all as truly parts of 
the expanded Wall Street of to-day as their bankers, 
brokers, and business are a part of the great Ameri- 
can money market. Around the Wall Street of a 
century ago as a nucleus have gathered the great 
moneyed interests of the New World, and it is they, 
rather than any particular street, that are designated 
to-day by the term " Wall Street." Yet, if the his- 
toric old street has broadened somewhat in signifi- 
cance and application during the past century, it has 
still lost none of its identity. Since the memorable 
day in 1789 when George Washington, standing on 
the steps of the old Federal House, took the oath 
as first President of these United States, the street 
he then surveyed has been a center for every great 
national enterprise. It has been the one fixed point 
around which have revolved the great financial 
panics that swept the land, and it has also been the 
source whence have sprung many of the greatest of 
those undertakings which have rendered our country 
and the age alike famous. 

Something over two centuries ago green rolling 
fields stretched from Broadway to the East River. 
Along the ridge of the hill at the head of Broad 
Street stood the high palisade of stout timber de- 
fending the town against any sudden incursion of 
the red warriors who still prowled the neighboring 
land. This palisade, which gave its name to Wall 
Street, has long been gone. It outlived the red 
men, and was finally torn down, the line it made 
being laid out and named Wall Street. To-day it 

and its significance are forgotten, as are those fair- 
haired, red-cheeked Dutch maidens, who, tripping 
down the foot-path to the water, bearing the house- 
hold linen to the wash, gave their name to Maiden 
Lane ; or the jolly old burghers, clad in baggy knee- 
breeches and smoking long pipes, who, in the days 
of doughty Peter Stuyvesant, played their game of 
bowls upon the smooth turf of Bowling Green. It 
is only in the few names like these still left that we 
find how historic are many old city ways. Among 
them all Wall Street stands with the earhest. There, 
when the old Town House was demolished in 1699, 
was built, upon the site of the present Sub-Treasury, 
a new City Hall, the building which was fitted up 
six years after the close of the Revolution for the 
meeting-place of Congress, and at which President 
Washington was inaugurated. 

The importance of Wall Street, therefore, may be 
dated from 1700, when the affairs of the municipal- 
ity centered there. By the middle of the century it 
was a " grand street " with handsome private resi- 
dences, the seat of the colonial legislature, and the 
central point for all the political and social life of 
the day. The State legislature, too, met in Wall 
Street until the capital was removed from New York 
to Albany, and for fully fifty years the official life of 
New York converged there. Nevertheless the tide 
of affairs was slowly rising in the old thoroughfare, 
and the private residences began to give way before 
the offices of the great merchants, who were forsak- 
ing lower Broadway and the smaller streets down- 
town. The shopkeepers and small traders, however, 
did not venture upon this ground. It was only the 
great merchant princes and moneyed traders who 
first planted the standards of business in Wall 
Street. To them naturally came others, and the 
Bank of New York, of which General Alexander 
McDougal was the first president, was in existence 
but a few years when it was removed to Wall Street, 




where it established itself in 1791 at the corner of 
WiUiam Street, being the first bank in New York City 
and the first on Wall Street. 

Had the wishes of the Bank of New York been 
respected there might never have been another one 
in the Street ; for its influence was strong in the 
legislature, and for years it was impossible for any 
other banking charter to be obtained. The estab- 
lishment of the second bank in Wall Street, and the 
State as well, came about in a most curious manner, 
and the credit of its accomplishment belongs to that 
shrewd lawyer, Aaron Burr. He introduced in 1 799 
into the legislature a bill to charter the Manhattan 
Company, a corporation of large capital which pro- 
posed constructing a system of water- works. Yellow 
fever, then an annual scourge, caused the people to 
welcome gladly any improved sanitary regulation, 
and pure water was considered of the utmost im- 
portance. Viewing the matter thus, even the watch- 
ful politicians who were assembled in the legislative 
halls saw little to object to in the new company, and 
it was chartered accordingly. One brief clause had 
been overlooked, however, and in it lay the pith of 
the cunning Burr's success. Thit clause, after recit- 
ing that the company's capital should be expended 
in the construction of a system of water-supply, 
provided that if any surplus should remain it could 
be used in any business " not unlawful." Under this 
head banking most certainly fell, and the Manhattan 
Company, finding speedily that they had a surplus, 
used it in founding their bank that same year, the lo- 
cation chosen being at what was then 23 Wall Street. 

One thing, however, must be said, which is that 
the Manhattan Company was equally prompt in 
providing its water-supply. The water was ob- 
tained from an old spring, and the reservoir was 
located near the corner of Reade and Center streets, 
where it remains to this day, an odd-looking, old- 
fashioned cistern enough, but still capable of pro- 
viding water as it did nearly a century ago, when it 
was considered almost as great an engineering feat 
as the present Croton Aqueduct. It is years since 
water has been used from it. The pipes by which 
the Manhattan Company carried water through the 
town were made from solid logs, the centers care- 
fully bored out and the lengths jointed together. 
Occasionally, even now, some contractor digging in 
the lower streets of the city brings to light one of 
these old pipe logs, laid so long ago ; and several 
sections thus exhumed have been bronzed, and are 
carefully kept in the Manhattan Bank as mementos 
of the great work in the earlier days. 

The choice by these two banks — the only ones in 

the city — of Wall Street for their location must be 
regarded as the final election of that street as the 
home of American finance. The United States 
Branch Bank was opened there in 1792 ; the Mer- 
chants' was there in 1805, and the Mechanics' Bank 
in 18 10. Meanwhile, too, another potent factor 
in centering business interests in Wall Street was 
introduced by the erection in 1794 of the Tontine 
Coffee-House. Here at noon every day gathered 
the merchants from their counting-rooms and ware- 
houses to discuss the news of the day, compare 
notes, chat, and even make trades. At the plain 
old bar in the center of the great room the best 
liquors, at a time when good liquor was the rule, 
were to be had ; and sedate old merchants, with a 
piece of the thirst-provoking salt codfish or a dry 
cracker in one hand, and a steaming glass of old 
Jamaica, oily schnapps, or sound old port in the 
other, gravely exchanged the coiirtesies of the day. 
" High 'Change " they called this hour, and, entirely 
apart from its convivial features, the benefits of this 
general intermingling of the business men of the city 
were found to be so important that a merchants' 
exchange, having the Tontine Coffee-House as its 
headquarters, was formed. Thus did the Exchange 
first manifest itself in Wall Street, and quotations 
now disseminated broadcast by electricity were then 
obtained by word of mouth, the Tontine Cofl^ee- 
House being large enough to contain all the great in- 
terests of the New York business world of 1795. 

In this latter year, with which the century under 
discussion begins, the banking facilities of New 
York, exclusive of the branch office of the Bank of 
the United States, aggregated considerably less than 
$1,000,000, and business was synonymous with for- 
eign trade. The merchants were the men of affairs, 
and, except in foreign commerce or domestic traffic, 
there were few ways to invest idle funds. The 
buying of land — real-estate investment — had not 
then become general, and manufactures were almost 
unknown, at least as a field for the investment of 
large capital. Gradually the very extension of 
trade and business requirements began to bring 
complexities. Capital increased, and the distinctive 
function of the banker began, which, according to 
Ricardo, is "using the money of others." Banks 
increased, insurance companies sprang up, and the 
management of money as apart from its use in the 
channels of trade gradually became more and more 
distinct. Private bankers, always in existence, gave 
up little by little the mercantile branches of their 
business, brokers who bought and sold for others on 
commission could be found as easily in Wall Street 

John P. Townsend. 


as at the present time, and by 1810 all the various 
elements found on 'Change to-day could be observed 
working themselves into distinctness. 

One of the earliest of the great merchants and 
bankers who ruled on Wall Street in 1796 was 
Nathaniel Prime, better known as " Nat " Prime. 
Later on he was the head of the famous banking- 
house of Prime, Ward & King, a firm as great in 
its day as any whose name rules the Street now. 
" Nat " Prime was a hard-headed, picturesque old 
figure, who had, rumor said, been a coachman in 
Boston in his younger years. A keen fellow, he had 
saved and loaned at interest until he gathered a 
small sum. He was doing a small brokerage busi- 
ness in New York, when, it is related, he met at a din- 
ner-party one evening a rich Southern planter. The 
conversation turned on money-making, and Prime 
remarked that if he had $5000 he would double it 
in a year. The planter asked him what security he 
could give for such a loan. " The word of an hon- 
est man," replied Prime ; and on that collateral the 
Southerner advanced him the money. So Nathaniel 
Prime got his start. Within the year he had paid 
his benefactor back ; but he gave no more than was 
strictly due ; and when, some years later, the same 
Southerner, being in financial straits, applied to him 
for a loan on the security he himself had given, he 
refused him. Gratitude was a debt the law did 
not recognize nor " Nat " Prime pay, but in his 
financial dealings he was always the very soul of 

From these beginnings to being head of the 
greatest banking-house in New York and a king in 
Wall Street was a career, however, that showed the 
business qualities of Nathaniel Prime ; and in the 
dawning importance of that famous street his was 
one of the most prominent figures. One of the first 
significant events showing the extending influence 
of Wall Street as a financial center was the famous 
conference of its four great powers, Nathaniel 
Prime, John Jacob Astor, John Robins, and John 
Hone, when the State of Ohio, in 1825, contemplat- 
ing internal development on a large scale, applied 
for a heavy loan. Two days and a night did this 
session last, and then the first great ultimatum of 
Wall Street magnates went forth to the Ohio ambas- 
sadors. Enact into statute certain stipulated con- 
cessions and the money will be forthcoming, was the 
tenor of this decision. Back to Ohio went the dele- 
gates. The legislature deliberated, and passed the 
required bills, and from Wall Street to Ohio went a 
vast loan. This first syndicate was one that might 
have been a little more peremptory in stating its 

terms than those of to-day, but it was equally 
prompt in living up to its agreements. 

The development of the business of Wall Street 
as a financial power brought in its train a system of 
operations based upon the exchange of fimds, the 
representation in stocks of intrinsic values, and the 
acknowledgment in bonds of indebtedness and lien. 
Around these three simple quantities has grown the 
multiplex money market of to-day. There were few 
stocks, or bonds either, in 1795; nevertheless the 
brokers were already on the Street, and Bleecker's 
famous old auction-room was the first place where 
the early bulls and bears resorted. It was a small 
enough stock-list they had to operate with in those 
days, and seemingly simple to master. The two or 
three banks and insurance companies then existing 
were quoted, and the three or four classes of gov- 
ernment securities, but these were all. Sudden or 
extreme fluctuations, except in time of war, were 
almost unknown, and an operator who conned his 
list well on Monday was generally posted for the 
week. Upon such a field as this did the great New 
York Stock Exchange make its first appearance. 
Under an old buttonwood-tree standing in front of 
60 Wall Street the early brokers of New York met 
one day in 1792, and set forth the purposes and 
obligations of the association in the following 
agreement : 

" We, the subscribers, brokers for the purchase and 
sale of public stock, do hereby solemnly promise 
and pledge ourselves to each other that we will not 
buy or sell from this date, for any person whatso- 
ever, any kind of public stocks at a less rate than one 
quarter of one per cent, commission on the specie 
value, and that we will give a preference to each 
other in our negotiations. In testimony whereof 
we have set our hands, this seventeenth day of 
May, at New York, 1792. Lemuel Bleecker, Hugh 
Smith, Armstrong & Barnewell, Samuel Marsh, 
Bernard Hart, Sutton & Hardy, Benjamin Seixas, 
John Henry, John A. Hardenbrook, Samuel Beebee, 
Alexander Zuntz, Andrew D. Barclay, Ephraim 
Hart, Julian McEvers, G. N. Bleecker, Peter 
Anspach, Benjamin Winthrop, John Ferrers, Isaac 
M. Gomez, Augustine H. Lawrence, John Bush, 
Charles McEvers, Jr., Robinson & Hartshorn, 
David Reedy." 

This agreement was the only one by which the 
members were bound until 1820, when daily meet- 
ings and the regular call of stocks began. The 
board had its permanent headquarters after 1825 in 
the Old Merchants' Exchange; but after that was 
destroyed by fire it established itself in one of the 



Jauncey buildings, whence it removed in 1842 to 
the New Merchants' Exchange, now the Custom- 
House. There it remained until 1853. Until that 
time the board had been the closest of corporations, 
its membership being governed by iron-clad rules. 
Financial news agencies were unknown in those 
days, and the board kept its proceedings a profound 
secret, violation of this secrecy being punished by 
expulsion. So intense was the curiosity over the 
proceedings of this body that an Open Board, which 
had been organized in 1837, took a building adjoin- 
ing and dug the bricks out of the wall for the pur- 
pose of spying out what was going on. 

The board removed from the Merchants* Ex- 
change Building in 1853 to a room in the old Corn 
Exchange Bank Building at Beaver and William 
streets. In 1857, the year of the great panic, the 
board changed its headquarters to the Daniel Lord 
Building, with entrances on William and Beaver 
streets. Here it was that some of the great specu- 
lators of the day flourished. Among these were 
Daniel Drew, Jacob Little, and Morse, known as 
the " lightning calculator," who made and lost a 
fortune of millions in a little over a year. The rule 
enjoining secrecy still continuing in force, it is a 
fact of record that $100 a day was freely offered 
for the privilege of listening at the keyhole during 
the time of the calls. The board continued to hold 
its meetings in the Lord Building until 1865, when 
it removed to its present location. During the war 
period the Stock Exchange, with a view to assisting 
the government, prohibited its members from selling 
government bonds "short," and also forbade them all 
dealings in gold. The later action led to the forma- 
tion of the Gold Exchange, which, although resulting 
in a loss of many millions of dollars to its members, 
was taken for purely patriotic purposes. A second 
Open Board of Brokers was organized in 1863, with 
headquarters in a basement in William Street, called 
the " Coal- Hole." So rapidly did its business in- 
crease that it soon took more spacious accommoda- 
tions in Broad Street, adjoining the Stock Exchange. 
The competition continued until 1869, when the old 
board called a truce. Amicable negotiations led to 
a consolidation of the Stock Exchange, the Open 
Board, and the United States Government 'Board, 
the result being the strongest public financial associ- 
ation in the country, and one of the most important 
in the world. William H. Neilson was the first 

The business of this exchange has become to-day 
much greater than that of the combined exchanges 
of the kind existing in the rest of the country. It is 

the very heart of Wall Street, and its functions are as 
vital to the development and prosperity of the coimtry 
as to the money market. It affords a constant and 
regular market for the securities of the great corpora- 
tions, and indexes their value in quotations of actual 
bids and sales. Without such facilities as it affords, 
the shares of these corporations, aggregating a total 
par value well up in the billions, would move so 
slowly that great enterprises would often lag from 
sheer lack of capital. Again, transactions would be 
vague, only known to the public when the interested 
parties were wilhng, and the door would be opened 
to manipulation and fraud almost unlimited were 
the safeguard it affords to be removed. The Stock 
Exchange, it is true, cannot control the relation of 
values to prices, nor can it direct the management 
of corporations by their oflficials; but it can and 
does secure a fair, free, and absolutely open market, 
where the dealings are matters of record and public 
knowledge. It can and does further insist that all 
stocks dealt in on its floor shall have certain quali- 
fications warranting their genuineness, and its " hst- 
ing" committee examines and investigates the 
claims of every new security brought before it, be- 
fore it is allowed on the list of those in which 
members may deal. In admitting a security to its 
list the Stock Exchange does not recommend it to 
the public ; it simply places it among the honest 
possibilities of the market, to stand or fall by its 
own merit. In the unlisted securities dealt in by 
special privilege of the exchange the action of the 
board differs but in degree, and any stock in which 
transactions are allowed, however sHght its intrinsic 
value may be, is stamped as not bogus. 

In the exercise of these functions the Stock Ex- 
change has come to stand as the great regulator of 
the market for securities, and its transactions, fully 
reported, serve as the standard by which values are 
established. In the internal economy of the Stock 
Exchange every method best adapted to conserve 
the ends of straightforward and legitimate business 
investment has been adopted. Among the more 
important changes of the last thirty-five years have 
been the following: the rule requiring the registry 
of stocks, in 1869 ; the abandonment of the regular 
call of stocks, in 1875; ^^^ ^^^^ authorizing the 
buying in, if not delivered when due, of contracts 
of active stocks, in 1884; the establishment of the 
Department of Unhsted Securities, in 1885 ; and 
finally the establishment in 1892 of its own Clearing- 
House, where all active stocks dealt in are daily 
cleared. The publicity the Stock Exchange thus 
allows to all transactions, the centralization it affords 



to the great interests of the country, and the regula- 
tions it imposes upon all operations are among the 
greatest advantages it confers. Its liberal enterprise, 
coupled with the strictest integrity, aided by the 
advantages mentioned, has most naturally placed 
it in the van of organizations of this character in 
the whole world. 

Leaving now the consideration of the component 
parts of Wall Street, and taking the Street in its true 
significance as one of the greatest financial centers 
in the world, its history becomes so vast, so inter- 
woven with the woof of national affairs and pros- 
perity, that it will only be possible to review it in its 
more important phases. The War of 1812, which, 
treading on the heels of the Embargo, brought the 
first set-back to the new Republic, found Wall Street 
still so identified with the mercantile interests that 
its prostration with them at the close of the struggle 
was only natural. The heavy war loans floated by 
the government, however, had found their largest 
takers in Wall Street, and that at a time when men 
needed all their faith and patriotism to beheve even 
in the eventual solvency of the country. This was 
the first time that the men and institutions of Wall 
Street came to the nation's assistance. Looking 
back and recalling the era of prosperity that followed 
the war and the reestablishment of the United States 
Bank, — a prosperity that in twenty years paid off the 
great war debt and amassed a surplus of nearly 
$50,000,000, — we can see that their confidence was 
not misplaced. In this same period, too, during 
which De Witt Clinton, in the face of the most 
violent opposition, achieved the construction of the 
great Erie Canal and placed commercial advantage 
in the hands of New York, the evolution of Wall 
Street was rapid. For twenty years its progress was 
unimpeded, and then came the great fire of Decem- 
ber, 1835. Millions of intrinsic value went up in 
smoke and flame, and millions more followed in lost 
time and opportunity before conditions could re- 
adjust themselves. Every insurance company in 
Wall Street gave up without recourse before the 
overwhelming loss, and the banks felt most keenly 
the ruin of their best customers, the merchants. 

Just at this juncture grim old Andrew Jackson 
demolished at a blow the great national bank. It 
was the match to the train, although few saw the 
mine it would explode. Between $40,000,000 and 
$50,000,000 distributed to the State banks through- 
out the country gave a momentary prosperity that 
found vent in the gigantic bubble of land specula- 
tion which the Specie Circular so woefully pricked. 
Banks were asked to redeem their notes, but could 

not, and then came the panic of 1837. Wall Street 
felt the crash, but nevertheless her bankers were the 
first to reopen their doors, and her capitalists the 
first to regain their confidence. Long and slow was 
the process of recuperation in the country at large ; 
but through it all, with the banks of the West and 
South opening one day only to suspend the next, 
Wall Street continued evenly on its course, and the 
completion in 185 1 of the Erie Railroad to Dunkirk 
shows how well her capitahsts had retained their 
faith and their courage. 

The long drag of ten years, succeeded by an 
equal period of prosperity struggling against bad 
banking and ill-regulated finance, culminated in 
1857. A branch office of the Ohio Life and Trust 
Company was located in Wall Street, and from 
there on the memorable 24th of August, 1857, issued 
the news of its suspension. Like a house of cards 
the great financial structure of the country came 
tumbling down. Over-importations, with no com- 
prehension of the effects of heavy and continued 
gold shipments, joined to over-speculation and high 
prices, may be said to have been primarily the cause 
of the disaster. It was more severely felt in Wall 
Street than its predecessor of a score of years before, 
for the reason that it affected wider and more gen- 
eral interests. The railroad, initiated in 1830, 
accepted by 1835, and being pushed in every direc- 
tion by 1857, was an interest with which, as to-day, 
Wall Street was identified. By means of the tele- 
graph, then lately brought into use, the dimensions 
of the panic were thoroughly known in a week. 
Failures aggregating $291,750,000 were reported 
for the year, and Wall Street set itself to work to 
repair the damage. Of what might have been, had 
the troubles of i860 never arisen, no one can say; 
of what did occur history tells us plainly. The 
government, harassed and embarrassed, turned to 
Wall Street, and it did not seek in vain. Never did 
a threatened power obtain freer or more speedy 
relief. Obligations were fast maturing which the 
government found no means to meet. Besides this, 
vast sums were needed to carry on military opera- 
tions. Not only the national credit, but the national 
existence, was threatened. 

In this emergency, Salmon P. Chase, Secretary 
of the Treasury, communicated with John J. Cisco, 
the subtreasurer of New York, to use his utmost 
endeavors to raise the money necessary to sustain 
the nation's credit. Mr. Cisco informed the banks 
of the condition of the national finances and of his 
instructions from Washington. He pointed out to 
the leading operators and financiers that within a 



few days interest on the accruing obligations of the 
government would have to be paid or it must neces- 
sarily go to protest. This was clearly one of the 
most critical moments in the history of the nation, 
and the crisis demanded sound judgment and 
prompt action. The gravity of the situation was 
clear to the bankers. The collapse of the govern- 
ment's credit would endanger the perpetuity of our 
very institutions. The foundation of all security 
was threatened, and the destruction of all values 
was imminent. 

The outlook throughout the Union at that time 
was dark, while all Europe looked on either in 
apprehension or in hope that our political fabric 
was going to pieces. But Wall Street took prompt 
and united action to extricate the government from 
its perilous position. The spirit of patriotism was 
everywhere, and the great financial institutions of 
the country responded with a heartiness that showed 
their faith. The old Bowery Savings-Bank, one of 
the richest,^ as it was one of the first, of such estab- 
lishments in New York, voted in February, 1861, to 
loan one half of all its funds to the government, and 
this was accordingly done. It is difficult at the pres- 
ent time, when foiu- per cent, bonds of the United 
States are selling daily in the market at twenty-one 
per cent, premium, to estimate the courage that was 
necessary at that period to resolve on such a course 
as that followed by this bank. Government securi- 
ties paying as high as seven and three tenths per 
cent, interest were at that time at a substantial dis- 
count, and it is matter of history that the issue, a 
year later, of legal-tender notes, or " greenbacks," 
fundable in six per cent, bonds, was largely influ- 
enced by the fact that except by such seemingly 
arbitrary methods the loan could not have been se- 
cured with either certainty or rapidity. 

In the history of war-time finance, and the mea- 
sures adopted under stress of the sternest necessity, 
none was more lasting in its effects, nor greater in 
the lengths to which it was ultimately carried, than 
this authorization of the issue of legal-tender notes 
— "greenbacks." When, in the autumn of 1861, 
the bankers of the country had paid to the govern- 
ment the last instalment of $50,000,000 of the 
$150,000,000 in gold loaned, their condition was 
one of extreme exhaustion. This money, disbursed 
by the treasury to the army and navy, returned to 
the banks but slowly, and the result of the drain 
that it had produced was seen when, on December 
30, 1 86 1, the banks suspended specie payment. 
Of this $150,000,000 in gold thus lent the govern- 
ment in the time of its direst need during the dark 

days following the disaster of Bull Run, Wall Street 
may pride itself on the fact that $105,000,000 came 
from its associated banks. The suspension of the 
banks complicated the financial situation seemingly 
beyond extrication. The maintenance of the army 
and navy, which was synonymous with maintaining 
the Union itself, was dependent upon a vast sum 
being raised within three months. Therefore it was 
as an expedient dictated solely by necessity and not 
choice that the first Legal-Tender Act, providing 
for an issue of treasury or government notes to the 
value of $150,000,000, redeemable in six per cent, 
twenty-year gold bonds, was passed, and signed by 
President Lincoln, February 25, 1862. $50,000,000 
of this issue, however, was to be in lieu of the trea- 
sury demand notes authorized the previous July. 
An issue of $500,000,000 in bonds bearing six per 
cent, interest, and redeemable in five and payable 
in twenty years, was also authorized by this act 
for funding purposes. The first legal-tender notes 
issued under the act bore the date March 10, 1862, 
and none were of smaller denomination than $5. 
Their effect in easing the pressure upon the treasury 
was immediate. Within a month another and 
smaller issue was declared, and on July nth a sec- 
ond issue of $150,000,000 in notes of the same kind 
was authorized, and bills of smaller denomination 
than $5 were authorized. On March 3, 1863, a bill 
was passed authorizing the $900,000,000 six per 
cent, loan ; but, at the urgent request of Secretary 
Chase, a clause was inserted leaving it optional with 
the Secretary of the Treasury to permit the right of 
holders to fund greenbacks into six per cent, gold 
bonds. Under this new power greenbacks were 
funded into sixes until January 21, 1864, when, the 
original $500,000,000 issue of bonds having been 
all taken up, the secretary decided that greenbacks 
in future could only be funded in the five per cents. 
The effect of this decision was to instantly and 
seriously depress the value of the enormous paper 
currency, and in it may be found the cause of much 
of the manipulation which, using the premium on 
gold as a leverage, shook and deranged values in 
the money market for so many years. 

It is thirty years now since the war closed, and 
during that time there has been so much of notable 
importance linked with Wall Street that only the 
more prominent events need be mentioned. The 
speculation in gold, giving the opportunity to un- 
scrupulous operators to manipulate the stock market 
for their own ends, culminated in "Black Friday," 
September 24, 1869, when many in Wall Street 
began business in the morning as rich men and 



went home ruined. Many versions of the causes 
have been given ; but one thing remains certain : 
that had not unnatural financial conditions permitted 
the famous Gold Room to exist, the disaster would 
never have occurred. It is always a situation of in- 
calculable danger, when a nation's paper is at a dis- 
count in her own markets. The next few years saw 
no abatement of the troubles by which the financial 
world was beset, and the rally which followed 1869 
was but the comparative calm preceding the storm 
which burst four years later. The great banking- 
house of Jay Cooke & Co., staggering almost single- 
handed under the terrible burden of the Northern 
Pacific Railroad, precipitated the trouble in 1873. 
Wall Street knew that a catastrophe was imminent, 
but how to avert it was a problem. 

As a bit of the unwritten history of that time, it 
is related that a representative of one of the great 
banking-houses in Wall Street, having formulated a 
plan to relieve the tension, went to Washington to 
lay it before the Secretary of the Treasury, William 
A. Richardson. The latter declined to believe in 
the gravity of the situation, and the banker gained 
an audience with President Grant, to whom he re- 
lated his fears of impending trouble and outlined 
certain measures for relief. So much was the Pres- 
ident impressed by the imminence of peril that he 
not only gave the banker a letter to the Secretary, 
requesting that official to give him a careful hear- 
ing, but the President at once ordered the with- 
drawal of his own private funds, a great part of 
which, as it happened, was on deposit with the firm of 
Jay Cooke & Company. How fortunate this action 
of the President's was was shown when the very 
next day the failure of the great banking-house was 

The panic which this failure brought on was 
sharp, as was the rally which followed and overdid 
itself about ten years later, when over-extension 
of railroads and incautious speculation brought a 
relapse. In May, 1884, the failures of Grant & 
Ward and the Marine Bank first alarmed the Street. 
A few days elapsed without further serious trouble, 
and then the Metropolitan Bank closed its doors 
and the trouble became general. No less than 
fifteen firms on the Stock Exchange failed during 
this time. 

It was in the panic of 1873 that the wonderful 
power of the Clearing-House as exercised in the 
issue of loan certificates was made manifest. This 
power had already been appreciated as one of the 
moving causes which had permitted Wall Street to 
respond so readily to the government's demands for 

large loans during the war, but its influence as a 
factor in easing a tense market and relieving the 
strain of panicky times was first learned in 1873, 
when certificates aggregating $26,565,000 were 
issued. Its second great manifestation was in 1884, 
and its latest in 1893, which, following, as we have, 
the course of financial crises since 1795, brings us 
to the present time. This panic, from the effects 
of which we are but now slowly recovering, had its 
origin in many causes. Some solvent institutions 
were forced to the wall through a general distrust 
which compelled them to realize on good security 
at a time when the market would not buy. In look- 
ing for the causes of this distrust many things must 
be considered. Tariff changes long impending pro- 
voked a general feeling of uncertainty detrimental 
to our commercial interests. The Silver Purchase 
Law caused, in addition, distrust of our currency 
both at home and abroad, causing the foreigner, 
for that reason, added to his needs on account of 
failures in South America, Australia, and Africa, to 
send back our securities for sale, which caused large 
shipments of gold out of the country. The Inter- 
state Commerce Law and the State Railroad Com- 
mission laws decreased the earnings of railroads. 
The Reading Railroad receivership, which occurred 
early in the year, was followed by others ; the failure 
of the Cordage Company in April; the failure of 
Western farm mortgage companies, caused by the 
inability of farmers to pay interest and principal of 
their mortgage loans; the failure of banks, caused 
by an unusual demand for deposits ; the hoarding of 
currency withdrawn from banks, so that the premium 
on it went up to five per cent., were all causes tend- 
ing to the general disaster. 

The issuance of Clearing-House certificates to 
the amount of nearly $50,000,000 followed, which 
tended to strengthen pubhc confidence, or prevent it 
from being wholly destroyed. All this happened be- 
fore the people's attention was directed to the mod- 
ification of the tariff which the election of the new 
administration and House of Representatives indi- 
cated. At and before the assembling of the new Con- 
gress in December public attention was attracted to 
the tariff, and this added to the distress; and to- 
gether with continued failures of corporations, in- 
dividuals, and railroads, the year 1893 closed in the 
midst of gloom. The last week, when the Atchison 
and New England railroads went into the receivers' 
hands, was the bluest week the country experienced 
in its history, unless the blue week in July may be 
the exception. 

Since then Wall Street and the government, or 



rather the treasury, have been in more intimate 
relation than at any other time since the Civil War. 
The real necessity for this close connection is found, 
perhaps, in those principles of national finance which 
leave an unprotected treasury to bear the brunt of 
attacks which it is powerless to avert. In this posi- 
tion no more logical ally than Wall Street could be 
found, despite the clamor of the uninformed ; and 
in the work of the recent Bond Syndicate, headed 
by J. Pierpont Morgan, has been given a demonstra- 
tion of certain important economic and financial 
principles never before correctly estimated. In the 
preliminary steps leading up to the formation of 
the Bond Syndicate of 1895 was demonstrated the 
helplessness of the treasury, unaided, to control our 
national finances. A depleted gold reserve in the 
first month of 1 894 was met by an issue in February 
of $50,000,000 of bonds bearing five per cent, inter- 
est, which sold at a sufficient premium to yield 
$58,661,000 in gold to replenish the waning trea- 
sury reserve. 

The tide of exchange, always flowing outward in 
the spring and summer, speedily lowered again the 
gold reserve. From $106,527,068 in February, the 
reserve had fallen to $52,189,500 early in August. 
The movement of the crops turned the tide at 
this juncture, but by October the reserve was only 
$61,361,826, or far below its traditional limit of 
$100,000,000 ; so a second bond issue was made in 
November. $58,538,500 was netted by this sale, 
and the gold reserve stood at $105,424,569. Then 
came the most significant and disquieting event in 
all otu: financial history. At a season of the year 
when large exports of gold were scarcely to be ex- 
pected there came a drain upon the treasury such 
as had never before been known. Distrust and 
rising excitement were visible everywhere ; less than 
half the gold withdrawn was for export, the remain- 
der was hoarded. In less than two months the gold 
reserve fell to $44,705,967, and drastic measures 
were required. It was evident that while the trea- 
stuy might continue selling bonds, it could not hold 
the gold in reserve in the face of the prevailing rates 
of exchange and the wide-spread distrust. Not only 
was action required that would inspire immediate 
confidence, but it must be also such as to sustain 
that confidence by regulating foreign exchange. 

This was the problem before the treasury in Feb- 
ruary, 1895, and the Bond Syndicate, which came 
forward to undertake the novel task, had far more 
to overcome than was generally recognized. For 
this syndicate to supply the treasury with gold was, 
comparatively speaking, a simple matter; but for 

them to so protect this reserve that it should not be 
drained away as the proceeds of the previous bond 
sales had been was a different matter. Nevertheless 
this the syndicate undertook to do, and a contract 
was entered into whereby the treasury bought from 
them, by an issue of $62,317,500 in "coin " bonds, 
3,500,000 ounces of gold, making the amount paid 
by the syndicate for the bonds $65,117,500. From 
February, when the agreement was entered into, 
until the last week in June, when the final payment 
into the treasury was made and the connection of 
the Bond Syndicate with the government terminated, 
this association kept the gold reserve above suspi- 
cion, and their final payment left the treasury with 
$107,512,362. How well they performed their 
contract is shown in the fact that during April, May, 
and June, when heavy gold shipments are always 
made, they so regulated exchange that instead of 
losing $45,000,000 of its reserve, as the treasury had 
done during the same three months of the preceding 
year, it actually increased it by $7,242,963. The 
method of the syndicate was to meet the local needs 
for exchange and to sell American securities abroad 
in sufficient amounts to offset this exchange. This 
it accomphshed from February until the end of July. 
By that time the movement of the crops should have 
been sufficient to influence exchange in our favor, 
but a delay of some three weeks in their shipment 
caused a brief fall. Nevertheless the power of the 
Bond Syndicate had been shown. It had done all 
it had contracted to do, and revived the public con- 
fidence at a time when it sadly drooped. It took 
great risks, accomplished great good, and showed 
again how far-reaching is the influence of Wall 
Street. That the reserve of the treasury cannot re- 
main where it placed it is no fault of the syndicate's. 
The root of this evil lies far deeper — in the fallacies 
of national finance; and the problem it presents 
must some day be met and solved. 

Without entering into any exhaustive argument of 
a subject so vast as this, it may be said that at the 
very base of the trouble are the greenback or legal- 
tender and United States treasury notes. While the 
aggregate of these is only about $500,000,000, their 
actual volume is unlimited, for the reason that they 
are redeemed only to be reissued. Like an endless 
chain, these notes running in and out of the treasury 
drain in a steady stream the nation's gold, of which 
by far the greater part goes to foreign countries, 
while our government, confronted with the task of 
paying out gold to redeem notes it may not cancel, 
has to borrow that its reserves and credit may be 
maintained. The nation is in the position where it 



has to give gold to all comers, but may not demand 
it for itself, except in the duties of the custom- 
houses. It is a fallacy which has already caused 
great loss to our people, and unless speedy action 
be taken will cause still more. It demands that 
the treasury exercise banking functions that it was 
never meant to have ; and until these so-called 
legal tenders are retired it is hard to see how the 
finances of this country can be either satisfactory 
or sound. 

If Wall Street was the sole reliance for supplies of 
gold when it was required for export, it could pro- 
tect itself from too great a drain by raising the rate 
of discount, which would check imports and stimu- 
late exports, thus giving the danger-signal to the 
commercial classes, who are directly responsible for 
the error of over-trading. The United States Trea- 
sury, which does not discount commercial paper, 
but has obligations outstanding in the form of legal 
tender or treasury notes redeemable on demand, has 
no means of protecting its reserve, which must be 
paid as long as the demand for it continues or until 
its stock of the metal is exhausted. 

The work of the Bond Syndicate closes the chap- 

ter of memorable events by which Wall Street has 
risen to its present importance. A century ago 
Lombard Street was the center of the world's 
moneyed interests ; Wall Street hardly had an exis- 
tence. To-day it rivals the former in many respects. 
The Paris Bourse and the great centers of Berlin 
and Vienna are as intimately connected with Wall 
Street as with one another. A flurry in one center 
reflects itself within the hour in all the others. The 
Old World is coming to regard American seciuities 
as the best and safest outlet for her investors. At 
the present time Wall Street most certainly is the 
channel leading to the richest and most profitable 
fields of enterprise in the world. The railroads, 
commerce, mines, and industries of our continent 
serve as her soiu-ces of supply, and in their 
development has been and will be still greater 

If in tracing this sketch of Wall Street I may have 
seemed to infringe in some degree upon the domain 
of national finance, it must be remembered that the 
two are indissolubly linked together, and in the in- 
tegrity of both lies the great safeguard of our coun- 
try's prosperity. 



THE development — yes, even the continued 
existence — of every industry described in 
this work depends on the dissemination of in- 
formation concerning it, and the resulting knowledge 
of what it is and what it is doing. Such dissemina- 
tion of information is advertising. 

It may take myriad forms, — traveling representa- 
tives ; exhibits at fairs, by window displays, or in 
the stores of the retailers ; distribution of samples ; 
circulation of catalogues, circulars, or other printed 
and lithographed matter; advertisements in news- 
papers ; signs, stationary and movable ; use of 
"novelties," — but whatever it is, it is all advertising, 
and, for want of a better term, may be defined as 
"an effort to cause others to know," and which it 
is hoped will also cause them to remember and do. 

Emerson says we should read history actively 
rather than passively ; that is, we should treat it as 
a commentary on our own lives. While much his- 
tory has in it nothing in common with our surround- 
ings or purposes, and cannot, therefore, yield us 
anything of direct value, the history of advertising, 
being a record of the adaptation of business methods 
to modern business conditions, is peculiarly rich in 
helpful information, and a careful study of it in the 
manner Emerson suggests should greatly benefit the 
modern business man. 

The advertising of the pre-printing period had, of 
course, to be adapted to the conditions of that age ; 
the crier, the carved sign, the crude poster, were 
then the best means of conveying information to the 
public. Even after the advent of the printing-press 
and the newspaper the development of advertising 
necessarily awaited the general education of the 
masses. Book and paper were alike valueless to 
those who could not read. How slowly conditions 
changed may be gathered from the fact that the 
Boston " News-Letter," the first paper in the country 
to maintain publication, had only 300 subscribers 
in 1744— forty years after its establishment. 


A century's history of advertising in the United 
States is a story of wonderful development ; but so 
marvelous has been its growth during the last fifty 
years that the record of the other fifty now seems 
scarcely more than one of mere existence. Ameri- 
can advertising has advanced along many lines, 
concerning each of which much of interest might be 

Inasmuch as it has been estimated that more than 
seventy-five per cent, of the amount expended for 
American advertising is now paid to the newspapers, 
— in which term are included the magazine, the 
trade journal, and all other publications of the class 
known as periodicals, — we will speak first of news- 
paper advertising. 

The wider use which it has attained over all other 
methods is not to be accounted for on the ground 
that newspaper advertising is a fashion or a fad. 
Its wonderful use to-day, and the still more wonder- 
ful future which awaits it, have for their enduring 
foundation the fact that newspaper advertising 
appeals to human intelligence by the great method 
through which information will for all time be com- 
municated—the printed page. The plain millions 
of America are an ever-reading, ever-wanting, ever- 
buying people, and the business man who realizes 
all three of these facts can but recognize the reason- 
ableness of newspaper advertising as a means of 
telling others what he has and what he is doing. 

Newspaper advertising could not, of course, exist 
apart from the newspaper press. So closely are 
they related, that the growth of the former cannot 
be adequately set forth without some reference to 
the latter. This accounts for the appearance here 
of a few newspaper statistics, which may be found 
in more complete form in the able article on news- 
papers elsewhere in this work. 

In 1795, at the beginning of the period covered 
by this work, there were in this country about 200 
newspapers. In 1810 there were 366 ; in 1820, 700 

Francis Wayland Ayer. 



(estimated) ; in 1 830, 1 000 (estimated) ; in 1 840, press. Comparative statistics of this character have 
1403; in 1850, 2526; in i860, 3343; in 1870, been gathered only three times. The first effort 
5871 ; in 1880, 11,314; in 1890, 17,712 ; in 1895, was in 1828, when the number of newspapers and 

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20,217. Dividing the century equally, the growth periodicals in the world was 3168, of which 800 

in each half is about 1000 per cent. (twenty-five per cent.) were published in America; 

It will be interesting at this point to consider the in 1866 the total number was estimated at 12,500, 

position which the United States occupies in relation and of these America claimed 5000 ; the count 

to the rest of the world in the extent of its newspaper made in 1882 showed a total of 25,766, of which 



1 1 ,000 were published in the United States ; at the 
present time the whole number is probably in the 
neighborhood of 40,000, of which more than one 
half are published in this country. 

The first daily in the United States was the 
"American Daily Advertiser," of Philadelphia, 
estabhshed in 1784, of which the "North Ameri- 
can " of that city is the direct lineal descendant. 
The following year the " Daily Advertiser," New 
York, was started. We reproduce on preceding page 
the first page of this paper, date of March 7, 1795. 
To-day we have upward of 2000 dailies. 

The first newspaper advertisement in America 
appeared in the Boston " News-Letter," estabhshed 
in 1704, a two-page paper, printed on a sheet eight 
inches by twelve, two columns to the page. It had 
but one advertisement, which read as follows : 

"This NEWS-LETTER is to be continued 
Weekly, and all persons who have any Houses, 
Lands, Tenements, Farms, Ships, Vessels, Goods, 
Wares or Merchandizes, &c., to be Sold or Let ; or 
Servants Runaway, or Goods, Stole or Lost; may 
have the same inserted at a Reasonable Rate from 
AND NOT EXCEED. Who may agree with 
John Campbell, Postmaster of Boston. All Persons 
in Town and County may have said NEWS-LET- 
TER every Week, Yearly, upon reasonable terms, 
agreeing with John Campbell, Postmaster for the 

The earliest recorded instance of the publication 
of any number of advertisements was in the " New 
England Weekly Journal," of Boston, established in 
1728, a two-page sheet, seven inches by thirteen. 
The news in this paper was all foreign, and from 
three to foiu* months old. The advertisements were 
of books, coffee importations, runaway slaves, sales 
of negro girls, and a notice of a school for negroes. 
Beyond this there was nothing but obituaries and 
the sailing and arrival of vessels. But notwithstand- 
ing these early instances of the use of advertisements, 
American advertising cannot be said to have begun 
before 1788, and then only in a very humble way, 
the advertisements being confined almost entirely 
to the classes just enumerated. These conditions 
continued until about 1820, when greater promi- 
nence began to be given to news. Hitherto the 
columns not devoted to advertising had been largely 
filled with elaborate treatises on party principles and 
politics, and articles on literary and scientific sub- 
jects; but as the news columns became fuller and 
more interesting, the number of subscribers and 
readers increased, and the growth of the advertising 

patronage kept pace with both. The rapid increase 
of newspaper advertising may, however, be said to 
date from the establishment of the "Sun," New 
York, in 1833 ; the " Herald," New York, in 1835 ; 
the " Public Ledger," Philadelphia, in 1 836 ; and 
the "Tribune," New York, in 1841. 

Leading metropolitan papers of to-day carry dur- 
ing the week from fifteen to forty columns of adver- 
tisements, while their big Sunday editions frequently 
have over 100 columns each. In a recent exami- 
nation of an ordinary week-day issue of ten leading 
dailies selected from different sections of the country, 
the space occupied by advertisements ranged from 
twenty-five per cent, to seventy per cent., the aver- 
age of the ten being forty per cent. 

In the beginning of the century advertising was 
almost exclusively local ; but to-day newspaper ad- 
vertising divides itself, naturally and perhaps quite 
equally, into two classes — local and general. I^ocal 
advertising portrays the activities of the locality. 
These find expression in the myriad "want" ad- 
vertisements and other classified announcements, 
for the gathering of which numerous branch offices 
are maintained, and the services of local and district 
telegraph companies employed ; and as well in the 
large daily announcements of the leading retailers, 
from some of whom single papers are said to receive 
an annual income approximating $50,000. 

General advertising, on the other hand, voices the 
enterprise of the business man anywhere who be- 
lieves he has that which is really wanted otherwhere. 
By such advertising, and with moderate outlay, 
almost numberless articles, otherwise little known, 
have been brought into general use throughout the 
country, and in like manner some of the most 
remarkable commercial successes of the century 
have been achieved. General advertising ranges 
from the advertisement of the dealer, who seeks to 
make direct sales to the consumer, to that of the 
manufactiu-er who annually expends from $500,000 
to $750,000 to acquaint people with the name and 
merits of an article which can be prociired only 
through the retailer. It has grown of late years to 
such dimensions that many papers find it profitable 
to employ one or more representatives whose only 
duty is to present the claims of the publication to 

Just as the marvelous strides by which American 
journalism has outstripped the journalism of all the 
rest of the world could never have been possible 
except for the marvelous patronage of American 
advertisers, so there would never have been such 
wonderful growth in advertising except for the men 



whose ability and energy have been entirely and 
untiringly devoted to the promotion of newspaper 
advertising. From the small beginning of special 
representation of a few papers, there has grown the 
advertising agency system of to-day, which well 
deserves recognition among American industries. 
There are probably more than fifty concerns in the 
United States trading as newspaper advertising 
agents, and to at least thirty of them the leading 
mercantile agencies accord recognition and commer- 
cial rating. The aggregate of capital invested runs 
into the millions, and one or more representatives 
of the industry are to be found in every prominent 
newspaper center. 

The first beginning in this line was made in 
Philadelphia, in 1840, by Volney B. Palmer, who 
afterward established branches in New York and 
Boston. The S. R. Niles Agency was an outgrowth 
of the Boston branch, and, with a record of honor- 
able dealing through all these years, still continues 
business. Mr. W. W. Sharpe, of New York, com- 
menced as a boy in Mr. Palmer's employ, and 
to-day does business under the style of W. W. 
Sharpe & Company. Mr. S. M. Pettingill, of New 
York, was also employed by Mr. Palmer, and with 
Mr. Bates carried on the business there established. 
The Bates & Morse Advertising Agency was their 
legitimate successor, and this business is now con- 
tinued by the Lyman D. Morse Agency. The 
business at Philadelphia was likewise carried on 
continuously and with constant growth, until in 
1878 it was absorbed, by purchase, into the business 
of N. W. Ayer & Son, who are to-day recognized 
leaders in this line. Some idea of the magnitude of 
their business can be gathered from the fact that 
their outlay for clerical help during 1895 will fall 
little, if any, below $100,000. 

As in the enormous growth of the advertising in- 
terest the advertising agency became an important 
factor as well as a necessary result, so the newspaper 
guide or directory was a necessity to, as well as an 
outgrowth of, the exigencies of the agency. At the 
first the agencies guarded with jealous care their 
lists of the papers of the country, but the rapid 
multiplication of papers soon necessitated printed 
Usts; and as the preparation of these lists necessi- 
tated the expenditure of large sums of money, the 
agents finally concluded to give them to the public, 
and solicit advertisements from the newspaper pub- 
lishers to help pay their cost. 

The first attempt was the " Newspaper Record," 
containing lists of newspapers and periodicals in the 
United States, Canada, and Great Britain, by Lay 

& Brother, Philadelphia, in 1856. The first per- 
manent publication of this character, however, the 
"American Newspaper Directory," was started in 
New York, in 1869, by George P. Rowell & Com- 
pany, newspaper advertising agents, who have con- 
tinued the publication regularly to this date. In 
1880, N. W. Ayer & Son, of Philadelphia, began the 
publication of the " American Newspaper Annual," 
which has been regularly issued since. In addition 
to these two directories, Pettingill & Company, of 
Boston, publish a very commendable handbook, 
while Dauchy & Company and J. Walter Thomp- 
son, of New York, and Lord & Thomas, of Chicago, 
all widely known advertising agents, with some 
others of lesser repute, publish manuals, more or less 
pretentious, varying in contents and make-up accord- 
ing to the publisher's conception of the needs of the 

Perhaps no better general idea can be obtained 
of the great extent of the newspaper press of the 
United States, and of the vastness of its advertising 
patronage, than by an examination and study of the 
most complete of these publications. It is almost 
impossible for one not familiar with the book to 
appreciate the amount of labor and expense which 
its annual revision involves. Hourly changes are 
going on in all parts of the country: changes of 
location, changes in editors, changes in size, price, 
or day of publication ; consolidations ; removals ; 
suspensions. When it is known that about 4000 
publications are started annually, and that, owing 
to suspensions and consolidations, the net annual 
increase in seasons of business prosperity ranges 
from 750 to 1000, even the uninitiated can appreci- 
ate in some degree the immensity of the undertaking, 
and the greatness of the industry that renders the 
publication of such books not only advisable, but 
absolutely necessary. The newspaper directory is 
as essential to the general advertiser as are the 
reports of the great mercantile agencies to the busi- 

ness man. 

An important factor in the spread of advertising 
has been the cooperative newspaper, known to 
printers and advertisers as " patent insides " or 
"patent outsides" — a system which has had all its 
growth within the last twenty-five years. Under 
this system half-printed sheets are supplied to the 
offices from which, after the printing of the other 
half, the papers are issued. The cost of type-setting 
is reduced to a minimum, because the reading mat- 
ter, with slight variations, is the same in all papers 
issued from any one house. This and the wholesale 
purchase of paper, together with the income from 



the advertising, make it possible to supply the half- 
printed sheets at a price scarcely more than the 
ordinary cost of white paper. It is readily apparent 
that this whole system is contingent upon newspaper 
advertising. Except for the income from the ad- 
vertising, the system could not exist. Except for 
the system, hundreds of small places over the coun- 
try could not sustain the local papers which they 
now issue. There are at present nearly 8000 such 
papers published, — more than one third of the entire 
number of the newspaper press of the country, — and 
consequently a large amount of money is annually 
expended for advertising in them. 

Magazine advertising is only about twenty-five 
years old. Although there were successful maga- 
zines before that time, they did not admit advertise- 
ments. It was with the appearance of the " Cen- 
tury " (then called "Scribner's Monthly"), in 1870, 
that the new order of things came in. Its first 
nvunber contained advertisements, which have stead- 
ily increased in quantity, until its issue of December, 
1894, contained 134 pages of them. In 1882, after 
thirty-two successful years without them, Messrs. 
Harper & Brothers yielded to the inevitable and 
began the insertion of advertisements in their " New 
Monthly Magazine." Here, too, the increase in 
quantity was rapid, reaching 144 pages in the num- 
ber of December, 1894. At the page rate of $250 
the advertising income of such an issue would be 
$36,000. Putting the average amount of advertis- 
ing the year through at 92 pages per month, the ad- 
vertising receipts of this one magazine for one year 
would reach $276,000. It is estimated that the 
December, 1894, issues of six leading monthly mag- 
azines represented an advertising investment of 
more than $180,000. There are, of coiu"se, a great 
many other excellent publications of this class which 
cannot here be mentioned, but which are widely 
recognized as advertising mediums of great value. 

It is said that Mr. Gladstone prefers the American 
to the English edition of such of our magazines as 
print both, for the reason that the advertisements in 
the American editions are so interesting, and set 
forth so clearly the enterprise and progress of our 
country. Thousands of people have made the same 
discovery as the great English statesman and stu- 
dent of human affairs. The truth is that the pubHc 
has to-day a great and growing interest in the infor- 
mation which we call advertising, and the newspa- 
pers and periodicals themselves would feel bound to 
print much of it as news, did they not print it in the 
form of advertisements. 

The trade journal is an interesting illustration of 

specialization. Starting with the papers which at 
tempt to set forth the condition and movement of 
trade in general, — of which class the " New York 
Prices Ciurent " (from an old issue of which we re- 
produce a page) was one hundred years ago, as it 
is to-day, a good example, — it has followed the 
branching out of each particular industry, keeping 
close step with its progress, until to-day there is 
scarcely a manufactming or commercial interest but 
has its representative journal, and often several of 
them, whose reading and advertising columns alike 
are of value chiefly to its own special class of readers. 

In early days a certain amount of advertising 
went with each subscription. For instance, one 
hundred years ago the payment by a merchant of a 
certain sum to the " Shipping List " as a subscription, 
carried with it the privilege of the use of all needed 
advertising space during the same period. That 
this privilege was not overworked is perhaps as 
forceful proof as can be given that the value of such 
advertising yet lacked recognition. 

That space itself then had no fixed value may be 
seen from the announcements in the " New Jersey 
Journal," of Elizabethtown, on January 16, 
1790, that "advertisements of A MODERATE 
LENGTH will be inserted three weeks for eight 
shillings, and two shillings for each insertion after- 

While newspaper space to-day very often sells at 
a fixed rate, the fixing of that rate is very arbitrary. 
The most mentioned factors are quantity of cir- 
culation, character of readers, and control of the 
field. The price of newspaper space has advanced 
greatly with its wider use. The " Herald," New 
York, and "Pubhc Ledger," Philadelphia, having 
always enjoyed liberal advertising patronage, are 
good illustrations of this. Established in 1835 ^"^ 
1836 respectively, they both at first charged for 
advertising fifty cents per square per insertion. The 
square was for a long time the unit of measurement, 
and fifty cents was for a long time the rate per 
square ; but the square itself gradually shrank in size 
with the flying years, until from being nineteen agate 
lines in 1836 in the "Ledger," in 1863 it equaled 
only four agate lines. This, of course, was twelve 
and one half cents per agate line. The minimum 
price soon climbed to twenty cents in the " Ledger " 
and forty-five cents in the " Herald," at which it 
stands to-day, showing an increase in the sixty years 
of 750 and 1800 per cent, respectively. 

While the price of advertising has been advancing, 
the size of the papers has been increased many 
times also. These enlargements have in almost 



every case been made necessary by the encroach- 
ment of the advertising upon the reading columns. 
In some instances the paper would become three 
fourths advertising, then an enlargement would fol- 
low which would reheve the condition until the 
ever-flowing, ever-growing stream of trade again 
filled its columns. The average daily edition of the 

umns. There are, even now, conspicuous exceptions 
to the rule above stated. A number of the most 
successful publications have obtained very unusual 
circulation, in very unusual time, by means of 
advertising in the columns of their contemporaries. 
A notable instance is the " Ladies' Home Journal," 
of Philadelphia, whose 750,000 circulation has been 

The New-York 

Publifliea every MONDAY by JAMES ORAM. 

Prices Current 

No. 33, Librrty.ftrect, near Mr. Carry Dmn't 

3 Dlis.peraitif.] 

MONDAY. January 9. 1797. 

[No. 5J. 

Monthlj Csmm'ittff, 

Thiothtlact Bache, 
Robert Bowne, 
Charli* L. 'Cxmman, 
William CoDMAv, 
DAvn> Gkim. 


Monday, Jan. 9. 

U. S. Bank Stock, 12 p. ct. 

New. York, . 28 

6 per Cent. - 16/3 

3 per Cent. ■- 9/3 

Deferred, . iq/a 

Monday Jan. g. 
Bills on London, 60 djj'j fglif* 
5 per cent, under par. 

On Amfterdam, 60 daysfiglit, .(o 
cents per guild, at Co days crcditi 

WHOLESALE PRICES, jrarefully correaed— In Dullare and Cents. 

From To 

iVsH£S, Jot, 



Allum, * 


Alinondi, - 1. 







Barley. (Scotch) - 

JBeant, white. 


Scef. Cargo, 





Standy,Fre . lA proof 


ad proof, 

3d proof, 

4tS proof. 

SptniOi, iftproof, 

id proof, 

3d proof, 

4tb proof. 

Sraziletto, . 


Bread, Pilot, 




Cr|icker«, . 


Xran, (flruck meaf. 


Brimflone, Roll, . 


Blittet, for export. 


CANDLES, dipt, 





Cntn, . , 





D. C, 


7 joi 




' 37 

9 5° 

10 50 

'■ S 

' H 
' 56 
I 66 
I 81 
' 37 

1 50 
' 19 
' 75 


9 5 


* 75 


» 5= 

2 5c) 

From To 


Ij. C. 

D. C. 

Cheefc, Englilh, -l-y- 








Cloves, . , 

' »5 

' 37 

Coal, Fofeign, 



10 50 

Virginia, - 


9 5c 

Cocoa, Surinam, - 






Copper in fticets, . 



Copperas - 


2 2? 

2 JC 

Coffee, for export. 






'3 75 






Cotton, Georgia, 




W.I (land. 


St. Domingo, 












DUCK, American, 


IZ 50 




Ravens, . 


IZ 50 

Englilh, No. I, 




Ruffia Sheetings, 



17 JO 



I 50 












Fi(h, Cod, dry. - 



do. pickled, - 



5 50 


9 50 


do. fmo.iked. 




Mackarcl - 




Herrings, . 


From To 


D. C ;p. C. 

Flour. Superfine, - 


■ 1 

Common, - 

10 5c| 

Virginia Kloui;, 


10 7e 

Middling, . 








3 5< 




Indian meal, 


5 6: 


Furs, Otter. 








•6| 17 




Red Fox, . 


I zc 

Crofb-Fox, - 

5° 3 

Grey Fox, i 

'9 'i, - 

19 62 

Lucif6Cat, . 

JO 3 JO 

Mulkrat"," .- 

6 34 


6 62 

Bear, North. 

75 + 50 




Beaver, North. 


2 25 

2 JO 



GENEVA, Holland 


6 2,- 



I iS 

' *S 


Wheat, North. 




I 87 


1 12 






Corn, North, (ntw) - 


Souih. (old) - 

1 1 


Gunpowder, Engl. ll). | 



American, - 



" Herald " and the " Ledger " is now perhaps eleven 
times the size of their first number, with the adver- 
tising barometer steadily on the rise. In this respect 
the two papers named are not exceptional, but 
rather good examples of prosperous journals the 
covmtry through. 

The development of newspaper advertising has 
been so rapid that many newspapers themselves 
have not yet caught up with it ; that is to say, while 
they all freely recommend it to other people for the 
improvement of their business, but comparatively 
few employ it for the development of their own. 
This, of course, refers to advertising in other journals 
— not to the exploiting of a paper in its own col- 

largely obtained and maintained by newspaper ad- 

Some attempts have lately been made to introduce 
color-work into the display of newspaper advertise- 
ments. This has generally taken the form of covers 
for special editions of newspapers and periodicals. 
Quite recently a large newspaper advertiser has been 
using color printing on colored paper for inserts in 
the leading magazines. This is regarded as a sig- 
nificant innovation. The wide use of color print- 
ing in the regular issues of daily papers, however, 
awaits the overcoming of mechanical and financial 

We have no means of knowing what was the 



value of the advertising in the newspapers of 1795, 
but the Tenth United States Census gives the value 
of advertisements in the American press in 1880 at 
$39,136,306, and the next census shows that these 
figures had increased in 1890 to $71,243,361 — a 
gain of eighty-two per cent, in ten years. We are 
justified in believing that the value to-day is con- 
siderably over $100,000,000 — a notable result of a 
century of progress! 

Perhaps nothing has done more to develop news- 
papers, and therefore newspaper advertising, than 
the railroads, whose remarkable story is told else- 
where in this volume. Perhaps, also, nothing has 
done more to develop the railroads than the news- 
paper. Each without the other would seem to be 
as ineffective as a half-pair of scissors ; but worked 
together they have cut the restraining cords of en- 
vironment and made possible the greatest national 
and individual prosperity. With the newspapers to 
tell of affairs and trade, and the railroads to carry 
persons and things, in spite of our wide territory, we 
really touch elbows with one another, and the future 
greatness of our commercial interests is beyond pre- 
diction. But of one thing we may feel certain : " the 
best is yet to be." 

When the business man of an earlier time put an 
advertisement in the newspapers, what he inserted 
was often an inventory of his leading articles — a 
sign, so to speak, showing the nature of the business 
carried on at the address indicated. The prepara- 
tion of such an advertisement required no special 
ability. Then, again, he generally expected what 
he put in the paper to stay there for a long time. 
This fact also contributed to make his newspaper 
advertising of very little trouble to him. 

But a change of ideas of what an advertisement 
should be, and how it should be used, brought into 
existence what are to-day two prominent features 
of advertising, viz., the advertisement writer and the 
paper devoted to advertising. The advertisement 
writer is an outgrowth of very recent years. The 
fierceness of competition and the increasing cost of 
newspaper space have made attractive, interesting, 
truthful, and convincing advertisements a necessity. 
■^I'he advertisement writer studies to supply this need. 
That he well supplies it must be evident to any 
reader of to-day's advertisements. Many an adver- 
tisement now represents far more thought than has 
been used in a corresponding space in any other 
part of the publication. 

The good advertisement writer must of necessity 
be able to see and to tell very clearly. The really 
capable ones are in demand, and receive good pay. 

Some business houses employ one exclusively; 
others use the services of those who write for any 
one on order. The leading advertising agencies 
also have them in their employ. Their work is 
telling for the better on American advertising. 

Papers devoted exclusively to the subject of ad- 
vertising have appeared in the last ten years. There 
are to-day perhaps a dozen of these, the largest 
number of them being connected more or less 
intimately with some particular advertising agency. 
In so far as they point out methods of proved suc- 
cess, publish unbiased statements, and call wider at- 
tention to the common-sense nature of newspaper 
advertising, they do the community a service ; but 
to whatever extent they air the foolishness of the 
" ad. smith," with his " catchy " and " fortune- 
bringing " advertisement, or circulate ill-informed or 
ill-intended criticism, they do injm-y to the greatest 
business-getting method of modern times. We be- 
lieve those familiar with them will agree that these 
journals are as a class growing broader in their 
treatment of newspaper advertising, better recogniz- 
ing its seriousness and its dignity. They certainly 
have great responsibility, as they receive very care- 
ful reading and are the exponents of a most useful 
business idea. 

The trade catalogue, always a useful business 
adjunct, has in recent years been transformed into 
what is often a work of beauty and interest, reflect- 
ing credit on all concerned, and materially increas- 
ing trade. The "descriptive circular" which the 
advertiser of other days was wont to offer his readers 
has been to a large extent superseded by the busi- 
ness primer, booklet, or brochtue, which is now a 
distinct feature in general advertising. It grew out 
of recognition of the fact that everything cannot 
be told in an advertisement. Perceiving that the 
prime object of a newspaper advertisement is ac- 
complished when the reader has by replying to it 
singled himself out from the mass of mankind and 
placed himself within reach of correspondence or 
representatives, the bright advertiser employs these 
publications to give details and to further or com- 
plete sales. To their preparation the best writing, 
illustrating, and printing skill is often brought, with 
the result that their value in advertising has now 
become widely recognized. It is impossible to 
estimate closely the amount annually expended in 
advertising matter of this class, but the figxu-es are 
certainly enormous. 

Reference should here be made to lithographic 
printing, which now covers an annual expenditure 
estimated at more than $15,000,000. Most of this 



output is intended for advertising purposes. Cards, 
folders, hangers, banners, albums, booklets, and 
posters are produced by the million. The work as 
a class is artistic and attractive, while competition 
and ingenuity have greatly cheapened its cost and 
widened its use. 

The use of posters for advertising is of course 
very old. The practice has not only grown greatly, 
but many of the posters themselves have of recent 
date possessed great artistic merit. The poster, as 
its name imphes, was originally an announcement 
intended to be posted or put up in a certain place, 
and it was therefore for a long time confined to local 
use. About twenty-five years ago it transpired that 
the effectiveness of a poster was often increased by 
its being placed in unusual positions. This led to 
sign painting, which in turn has become a recog- 
nized method of general advertising. To-day the 
most effective and ingenious use is made of blank 
walls, bams, etc., for acquainting the public with 
various articles. The employment of natural scenery 
as a background for this work has fallen under 
public disapprobation, and appears to be going into 

Another development of this outdoor work is the 
erection and painting of large bulletin-boards along 
the lines of railroads and great travel. These are 
leased by the year to advertisers. Such a sign- 
board, thirty feet long and four feet high, costs the 
advertiser $30 a year. Perhaps $1,250,000 are 
spent annually in all kinds of out-of-door painting, 
exclusive of the bill posting above referred to. 

Street-car advertising may be said to be a devel- 
opment of the last fifteen years. During the first 
half of this period it received practically nothing but 
local patronage. About seven years ago the inven- 
tion of the now everywhere common curved car- 
rack, because of the uniformity in the size of cards 
which it secures, opened the method to the use of 
general advertisers, who were not slow to avail 
themselves of it. From that time the growth has 
been very rapid, until to-day there are perhaps in 
this country 15,000 street-cars carrying advertise- 
ments. At $100 per year per car this would make 
the annual advertising expenditure $1,500,000. 

Enterprise is ever seeking expression. Advertis- 
ing has always been the expression of enterprise. 
The few meager, colorless announcements of 1795, 
written with a dull and heavy pen, fittingly expressed 
the enterprise of that day. At the close of a cen- 
tmy of marvelous progress the enterprise of to-day 
finds expression in advertising of every conceivable 
form, in every available place, in the preparation 
and illustration of which have been combined the 
best obtainable skill of hand and brain. 

Great as has been the evolution of a hundred in- 
dustries in a hundred years, wonderful as has been 
the advance in the arts and sciences, the printing- 
press has always led the way, and is to-day the 
herald and helper of them all. Its usefulness will 
still further increase with the discharge of its duty, 
which will be to tell the story of the better things 
which the opening century will unfold to the better- 
seeking millions of America. 

jSt jSk jSSc iSSi mS( jfefSt nSc mSc hSc mSc iSSi mSk mSc mSc mSc jSEt mSi mSc mSc hSc jSc 

•f* ^ff *$* 'f' w 



y% MERICAN fire and marine insurance business 

/ \ had its birth at about the close of the eigh- 
A. \^ teenth century. Both kept in the forefront 
of American affairs for many years, but marine insur- 
ance suffered heavily when the American flag began 
to disappear from the high seas. For the past 
quarter of a century it has had a hard struggle to 
keep itself anywhere near the old standard of pros- 
perity. To do this it has had to draw for the 
greater part of its returns upon foreign commerce, 
and been forced to compete with English companies. 
Fire-insurance has not, as a whole, fared much better. 

So distinct are the differences in the business 
operations of these two lines of insurance that it is 
necessary to treat of each separately. The theory 
of fire-insurance is exceedingly simple — it collects 
from the many and distributes to the few, relying 
for its profit upon an intelligent calculation of the 
chances of fire and the collection of more than it 
distributes. The sources of profit are twofold : first, 
interest upon invested funds; second, excess pre- 
mium receipts over losses and expenses. 

Reviewing the history of fire underwriting for the 
past century, it cannot be classed as one of the 
profitable departments of business activity. A cer- 
tain number of companies have been successful, but 
only a very insignificant percentage of the various 
companies organized in the United States during 
the past century have sustained life for a score of 
years. Only one American company which was in 
existence in 1795 is now in successful operation. 
It is the Insurance Company of North America, of 
Philadelphia, organized in 1794, and which now 
has a cash capital of $3,000,000, with total assets 
of nearly $10,000,000. 

The large conflagrations of the century at New 
York, Chicago, Boston, Philadelphia, Portland, and 
Pittsburg each in turn crippled all interested com- 
panies and ruined many ; but, as experience is a 
dear but a sure teacher, these fires brought about 

needed improvements in municipal fire departments, 
and led to new safeguards in underwriting. At the 
time of the great New York fire in 1835 there were 
about forty companies doing business in the city, 
and all but two found themselves hopelessly in debt 
when the blaze had burned itself out. The two 
companies spared were the Bowery Fire and the 
Jefferson, which had not taken many risks down- 
town, in which section of the city the fire raged. 
To save the companies from utter ruin the legisla- 
ture passed an act on February 20, 1836, allowing 
them to take what assets they had and pay their 
losses, without interfering with their charters. This 
privilege was granted for a limited period. About 
ten companies availed themselves of this opportu- 
nity, and then obtained a new capital and continued 
in business. Twenty-eight of the remaining thirty 
companies never recovered from the blow. The 
company paying the greatest percentage of losses 
was the Howard, which gave fifty-eight per cent. 
To-day there are only two companies — the Eagle 
Fire and the North River — in existence that sur- 
vived the conflagration of 1835. Ten years later 
there was another great fire in New York, in which 
the damage was also large ; but neither the public 
nor the insurance companies suffered as much com- 
paratively, owing to more careful underwriting. The 
fire of 1845 brought about a schedule of new tariff 
rates, which lasted until 1850. 

The Chicago fire of 1871 was the most disastrous 
conflagration underwriters have ever known. It has 
been accurately estimated that $118,000,000 worth 
of property was destroyed, on which the insurance 
amounted to $92,000,000. Of this sum companies 
outside of the State of Illinois had written $58,144,- 
000, and while the exact amount held by Illinois 
companies could never be ascertained, it was calcu- 
lated to be $33,878,000. $39,233,000 was paid to 
the assured by the companies outside of the State. 
About every insurance company involved in the fire 


Henry H. Hall. 



was forced to make assessments on its stockholders 
in order to live. Credit is due to the Liverpool, 
London & Globe Insurance Company for their 
promptness in paying the amount of their losses at 
Chicago ; but to the Home of New York, ^tna of 
Hartford, as well as to many other American com- 
panies, equal credit is due. The strength of many 
American companies was manifested by this severe 
trial, and the necessity for foreign capital was fully 
demonstrated. It is safe to say that over one 
hundred companies were driven to the wall, while 
every company in the State of Illinois was wiped 
out. Shortly after the Chicago fire came the great 
Boston fire, both preceded by the one in Portland, 
each adding its proportion to the general wreck of 
fire-insurance companies. 

It may therefore be very readily seen that the 
business of fire underwriting in the United States for 
the past century has been done at a loss, and the 
most successful companies, as a whole, have not 
retained more than simple interest upon their capi- 
tal and invested funds. The question has been 
asked many times. Why cannot this important inter- 
est be placed on such foundations as to present a 
reasonable hope of profit to capitalists on their 
investment? The chief obstacle to this attainment 
has been the ignorance of legislators. Every year 
the fire-insurance interest runs the gauntlet of the 
legislatures of all the States, protecting themselves 
from attacks made with a persistency born of igno- 
rance, suspicion, and prejudice. Every recurring 
legislature is freighted with schemes without num- 
ber to "regulate" the fire-insurance business. To 
the average legislator there is just enough mystery 
about the business to tempt him to the same mental 
exertion he displays on the " Thirteen Puzzle " and 
in squaring the circle. 

Every insurance company must exhibit for publi- 
cation its premiums and losses in every State where 
it transacts business, and every detail of its manage- 
ment is open to pubhc inspection. It is a blow to 
all originality, a handicap to enterprise, when skill 
and knowledge gained by experience are thus given 
to every competitor ; but this, even, does not satisfy 
our lawmakers. Various schemes of taxation are 
devised. State and municipal, to which are added all 
the forms of restrictive legislation that the mind of 
man can conceive. In many States insurance com- 
panies are denied recourse to the United States 
courts, must submit to poUcy forms drafted by the 
various legislatures, and are compelled to adopt such 
methods of loss adjustment as can be comprehended 
by the feeblest lawmaking mind. The history of 

fire underwriting for the past century is a record of 
the incapacity of American legislators. 

The aggregate fire premiums collected annually 
in the United States amount approximately to 
$140,000,000. This is a tax levied upon every 
property owner in the United States. If complaint 
is made of the expense of continuing the fire-insur- 
ance business, it should be recalled that the fire- 
insurance capital of the world is at the command 
of the resident of the smallest village. With few 
exceptions, the largest manufacturing plant can 
secure in the village in which it is located ample 
insurance from the strongest companies in the 
world ; and if loss occurs, the same is adjusted and 
paid on the ground. To afford these facilities vast 
and expensive organizations are necessary. Every 
important insurance company has a large staff of 
special agents and adjusters, and in addition to this 
there are many associations to advance the interest 
of associate companies. Among these is the National 
Board of Fire Underwriters, composed of the lead- 
ing companies of the country, which was organized 
in 1866. The chief work of this organization is on 
the line of public benefit, such as the recommenda- 
tion of proper building laws to the various munici- 
palities of the country; the inspection of all fire 
departments, with suggestions for their improvement 
and the increase of their efficiency; and the arrest 
and punishment of incendiaries. Through the 
efforts of this board the people have been educated 
as to the true economy of good building laws and 
efficient fire departments. Within the past few 
years the board has maintained an electrical bureau, 
and by experiments and investigation has done 
much to minimize the hazard incident to the gen- 
eral use of electricity for light and power. With 
great labor and expense it is endeavoring to awaken 
public interest to the great drain on the national 
resources by the annual fire waste, so large a portion 
of which is due to careless building and lax munici- 
pal administration. In addition to this organization 
the fire underwriters maintain in every State and in 
every town local boards of underwriters, for the 
collection of statistics, upon which equitable rates 
can alone be predicated. 

Through the influence of the New York Board of 
Fire Underwriters a paid fire department for the city 
of New York was secured. The fire-insurance 
companies are also maintaining, at their own ex- 
pense, fire patrols in thirty of the large cities. These 
patrols are established by law, and supported entirely 
by the fire-insurance companies transacting the busi- 
ness in their several localities. New York City was 



the pioneer in the establishment of these organi- 
zations, and they are organized to protect life and 
property at fires, regardless of the insurance interest 
therein ; and the New York Board of Fire Under- 
writers has already distributed numerous gold med- 
als to its patrolmen for heroic efforts in the saving 
of life. Fire underwriters stand unrivaled by any 
form of purely business association in their success- 
ful efforts for the general good. 

Reviewing the history of fire underwriting for the 
past century, there can be observed a steady advance 
in the methods and practice of the business. There 
must always be an element of chance in its conduct, 
but there has been a gradual advance to a more 
scientific basis of action. In the past fifty years 
there has been a complete change in the controlling 
principles of the business. The older method was 
to "accept the risk as you find it," and charge 
accordingly. The more modern method is to sug- 
gest improvements, with a view to a lower rate and 
larger liability. To make this more clear, in days 
past, underwriters would accept a small " line " on a 
poor risk at a high rate; but the present method 
is to decline it altogether and suggest improve- 
ments, and, when made, give a lower rate and larger 

The fire underwriters now maintain several very 
expensive organizations of expert surveyors for the 
sole purpose of instructing manufacturers as to the 
best means of fire protection, that the lowest rate of 
fire-insurance may be secured. This entire change 
of method is due to the influence of the New Eng- 
land system of mutual insurance ; and it is but sim- 
ple justice to these companies, of which Edward 
Atkinson is now the official head, that this recogni- 
tion should be made. 

The conflict between projectile and armor-plate 
is no more interesting than the constant combat be- 
tween increase in the size of buildings and growth 
of cities, and the improvement in fire-extinguishing 
facilities shown by the development of the New 
England system. The inception of this system was 
due to the lack of proper recognition by stock com- 
panies of improved appliances for the-extinguishing 
of fire. A manufacturer, having introduced a fire- 
pump in his mill, asked for a reduction of rate for 
this appliance. It was denied. Other manufac- 
turers were interested, and, having equipped their 
mills with fire-pumps, a mutual company was organ- 
ized ; and from that time there has been a constant 
study to reduce the fire hazard, and to secure insur- 
ance indemnity at least cost by the agency of a 
mutual system. From a simple pump to perforated 

sprinklers, thence by various improved devices to 
the present perfected automatic sprinkler head, were 
gradual steps in the line of defense against fire. 

The general introduction of automatic sprinklers 
has not only reduced the fire waste, but will eventu- 
ally (with slow-burning construction) revolutionize 
the practice of fire underwriting; for, with less 
liability to fire, the stronger companies will increase 
their acceptances on individual risks, thus concen- 
trating the business in a smaller number of com- 
panies, and reducing competition and expense. 

Starting from the change in the conception of the 
province of the underwriters, the advance to the 
present practice is plain and logical. In former 
times the underwriters would promulgate minimum 
rates for various classes of merchandise — sole- 
leather, package dry-goods, etc. Upon each of 
these various classes a uniform rate would be made 
for brick and frame buildings. Assuming the rate 
to be adequate to pay the losses and a profit on this 
class, this system was clearly inequitable. If the 
stock of one merchant was in a two-story brick 
building of small area, with no open skylights, etc., 
it was certainly unfair to charge him the same rate 
as the merchant whose stock was in a higher and 
larger building, with skylights, wood cornice, and 
well-holes. To rectify this and similar cases of in- 
equality a plan of schedule rating was put in force 
by General Arthur C. Ducat, of Chicago. While 
surveyor of the Chicago Board of Fire Underwriters 
he formulated a plan of schedule rating, constructing 
a theoretically perfect building, and adding for defi- 
ciencies of construction. Within the past few years 
this system of schedule rating has been elaborated 
by President F. C. Moore, of the Continental Insur- 
ance Company, of New York. A universal mercan- 
tile schedule has been devised by him, which adopts 
the same principle for various classes of towns and 
cities. This system has already been adopted by 
local underwriters in several of the larger cities. 
The application of this principle will lead to a grad- 
ual improvement in the construction of buildings, 
and ultimately to the modern " fire-proof," or, more 
correctly, "buildings of slow-burning construction." 
In the line of schedule rating, and a corollary 
thereto, is the general introduction of the " coinsur- 
ance" With the improvement in the con- 
struction of buildings and the increased efficiency of 
fire departments, and with the aid of fire patrols, it 
is expected (and to some degree realized) that the 
percentage of loss by fire will be reduced — a fact 
that many property owners have not failed to 
appreciate, and many have inclined toward a reduc- 



tion of the percentage of insurance carried to valu- 

Fire-insurance rates, to be equitable, must not 
only be predicated upon the construction and en- 
vironment of each building insured, but must also 
have relation to the percentage of insurance to value 
carried by the merchant. The sole object of the 
various forms of coinsurance clauses insisted upon 
by fire underwriters is to secure a uniform practice 
upon the part of property owners as to the percen- 
tage of values insured. 

Each State has an insurance department, to which 
all classes of insm^ance companies doing business in 
the State must make an annual statement of their 
financial condition. The head of such department 
is charged by statute with the duty of determining 
the solvency of every company applying for permis- 
sion to transact business in his State, as well as 
at the time of the renewal of the annual license. 
The system of State supervision was first adopted 
by the States of New York and Massachusetts ; and 
the policy adopted by William Barnes and Elizur 
Wright, respectively superintendents of the insurance 
departments of the States named, for the govern- 
ment of such departments has been generally fol- 
lowed, and in the main the standard of personal and 
official probity established by these gentlemen has 
been observed, with a few monumental exceptions. 
There is no class of government officials, either 
State or national, in whom is vested such autocratic 
power as is accorded the superintendents of the in- 
surance departments of the various States. This 
power, exercised wisely in the protection of the pub- 
he against fraudulent institutions, is beneficent and 
mutually advantageous to the reputable companies 
and the public ; but when exerted in securing and 
publishing the smallest detail of management, it is a 
barrier to proper development, and when exerted 
corruptly it becomes legalized blackmail, of which, 
unfortunately, there have been a few instances. 

The business of insurance supports many trade 
papers, many of them useful and edited with great 
skill and ability. The " Insurance Cyclopedia " 
(pubhshed by the "Weekly Underwriter," one of 
the best insurance journals) gives a list of fifty-one 
such papers now regularly issued. Fire-insurance 
is now conducted throughout the United States by 
thousands of agents, and the percentage of funds 
lost through misappropriation is infinitesimal. These 
agents, as a rule, are selected with great care. 
From the ranks of insurance agents have sprung 
governors of States, judges, senators, and foreign 

At the present time there are five British com- 
panies engaged in the business of fire underwriting 
in the United States that have been continuously in 
business for over a century, to wit : London Assur- 
ance Corporation, organized 1720; Norwich Union 
Insurance Company, organized 1797; Phoenix As- 
surance Company, organized 1792 ; Sun Fire Office, 
organized 1 7 1 o ; Union Assurance Society, organized 
1 7 14. To-day the fire-insurance companies of 
foreign countries transact twenty per cent, of the 
entire business of fire underwriting in the United 

The distribution of the risks assumed by the fire- 
insurance companies doing business in the United 
States is shown by the following table of the amount 
at risk and premiums collected in 1 894 : 









District of Columbia 





Indian Territory . . . 
















New Hampshire. . . 

New Jersey 

New Mexico 

New York 

North Carolina .... 

North Dakota 





Rhode Island , 

South Carolina 

South Dakota 







West Virginia 

Wisconsin , 

Wyoming , 

Amount at Risk. 










































































































The history of American marine insurance begins 
in 1793, when the General Assembly of Pennsyl- 
vania chartered the Insurance Company of North 
America. This company is still in existence, and 
its long life is in a measure due to its special charter 
privileges of being able to conduct a marine as well 
as a fire insurance business. In 1796 the second 
marine-insurance company was formed under the 
name of the New York Insurance Company, with a 
capital of $500,000. Since that time twenty-seven 
other marine companies have been organized and 
commenced business in New York State, and of 
this number only one, the Atlantic Mutual, which 
was chartered in 1842, is still in operation. 

New York's marine-insurance history is that of 
all the other seaboard States, for in nearly all marine 
insurance once flourished, but has now succumbed 
to English competition. The golden period of 
American marine insurance was between the years 
1840 and i860, when the clipper sailing ship was 
developed and perfected. In those times the lead- 
ing merchants owned their own ships, and frequently 
a member of the firm would go to China of the 
East Indies to supervise the proper distribution of 
the cargo, and to secure a remunerative one for the 
return. The ship and cargo were insured with an 
American company, and as it might be as long as 
nine months before the vessel was heard from, the 
risk was considerable and rates were high. As 
much as five or six per cent, was charged for insur- 
ance in those times. The rate on dry-goods from 
Liverpool to New York in the old packet sailing 
ships was placed at two per cent. This trade was 
carried in American ships, and the insurance, both 
on the vessel and on the cargo, was naturally placed 
in American companies. 

But the rates of insurance have changed with the 
transformation of the ocean carrying service. The 
East India goods are now shipped across the Pacific 
to San Francisco, and thence East via rail. The 
cost of insurance on these is now only three quar- 
ters of one per cent. Rates on the Atlantic have 
likewise declined. Insurance on dry-goods and like 
merchandise carried in the modern " liners " is 
placed at two tenths of one per cent. In other 
classes of goods depreciation in rates is in like pro- 

Marine underwriters do not ascribe the decline in 
American marine insurance to any trouble from 
unwise laws or legislative interference, but to the 
changed business conditions and to English compe- 
tition. The bulk of the carrying trade of the world 
has passed into British hands, and a British mer- 

chant and ship owner insures in a British company. 
The English marine companies have, as well, invaded 
American soil, and have secured a large portion of 
the American business. When the Enghsh com- 
panies first established themselves in America, along 
in the early seventies, they began cutting rates. 
The American companies did not effect any com- 
bination to prevent this, but followed their example. 
The American companies were also placed some- 
what at a disadvantage by the laws governing the 
admission of foreign marine-insurance corporations. 
The foreign companies are required to make a 
deposit before they can write American business; 
but in New York State, which has stringent insur- 
ance laws, the amount is fixed at the minimum 
capitalization allowed a home company, viz., $200,- 
000. So much of the carrying trade of the world 
is done under the British flag and with the aid of 
British credit, and with countries under British con- 
trol, that the American underwriter, working against 
all these disadvantages, is seriously handicapped. 
Therefore, there being no national or local tariff asso- 
ciations among marine underwriters, the American 
companies are worsted in this rate war. There 
are now not enough of them to form any sort of an 
association which would wield much power. 

Despite the uphill work of the American com- 
panies to hold their own, through loss of prestige 
on the ocean and active rivalry on land, there are a 
number of stock and mutual American marine-insur- 
ance companies which continue to do a flourishing 
business. The largest and one of the oldest is the 
Atlantic Mutual, of New York, which has over 
$12,000,000 of assets, and has been most carefully 
managed throughout its career. It was formed in 
1842, at the time when many stock companies were 
turned into mutual companies, and by which change 
the profits accrue to the poHcy holders instead of 
the stockholders. The company is noted for retain- 
ing its faithful and tried officers until their death. 
The late John P. Jones was connected with the 
company for fifty years, and was its president for 
forty. In his life-work of building up the company 
he was ably assisted by Vice-Presidents W. H. H. 
Moore and A. A. Raven, who have been with the 
company thirty and forty years respectively. Among 
the other large companies which still do a thriving 
business are the two Boston corporations, the China 
Mutual and the Boston Marine. 

There have never been many marine Lloyds in 
the United States, though this form of marine insur- 
ance has been in vogue in marine underwriting 
in Great Britain. The origin of the term is both 







Classes and States in 

WHICH Home Offices are 



Class I 






District of Columbia 















New Hampshire . . . 

New Jersey 

New York 

North Carolina 

North Dakota 




Rhode Island 

South Carolina . . . . 

South Dakota 







West Virginia 



Class 2 , 



Class 3 

Georgia , 

Illinois , 




Maryland , 






Rhode Island 





















































Fire, Ocean Marine, and In- 
land Risks in Force, and 
Premiums charged thereon, 
December 31, 1889. 

Amount in 



















1 13,469,208 

























































































Classes and States in 

WHICH Home Offices are 


Class 3 A 


Massachusetts .... 
New York 

Class 4 



District of Columbia 











New Hampshire . . . 

New Jersey 

New York 



Rhode Island 

South Carolina .... 





West Virginia 


Class 5 6 










Massachusetts .... 





New Hampshire . . 

New Jersey 

New York 

North Dakota 



Rhode Island 

South Carolina . . . 

South Dakota 


West Virginia ... 


























2 60 





3 86 













Fire, Ocean Marine, and In- 
land Risks in Force, and 
Premiums charged thereon, 
December 31, 1889. 

Amount in 








































































1 Includes i company for which no report is made. * Only i company reported and that too incompletely to tabulate. 

2 Includes 3 companies for which no report is made. ^ Includes 4 companies which could not report risks in force. 

3 Includes 2 companies from whom a statement of risks in force could •* The companies of this class, as a rule, charge no premiums, but 
not be obtained. assess for losses. 

'' Includes 6 companies from which no report was received. 



interesting and peculiar. The name of Lloyd orig- 
inated in old Lloyd's Tavern, in Tower Street, 
London, far back in the days of good Queen Anne. 
It was the practice of many ship owners and trad- 
ers to drop in at the tavern and talk over their pro- 
spective profits ; and gradually a custom developed 
of inscribing their names on a blackboard, certifying 
that the men signing would be jointly liable for the 
loss of a vessel during a certain voyage. From this 
crude beginning have grown the world-famous as- 
sociations in the British Isles. In the United States 
there are a few Lloyds, two of the principal ones 
being located in New York City — the United States 
Lloyds and the New York Marine Underwriters. 

The scope and definition of a marine policy is, of 
course, entirely different from a land fire policy. 
The risks insured against are many, and may be 
summarized as including all perils of the sea. There 
are two classes — a voyage and a time pohcy; the 
former is generally used in insuring vessels, and the 
latter for cargoes. There are naturally many clauses 
governing marine-insurance policies, such as capture, 
seizure, war, and so on. The life of the insurance 
on a ship begins at the port from which it is insured 
until moored for twenty-four hours at the port to 
which it is insured. When an insurance is made 
on freight to be carried under a charter, the policy 
attaches as soon as the vessel sails, although she 
may be destined to a distant port for her cargo. 

Though single losses to marine underwriters have 
been small, compared with some of those of fire 
underwriters, there have been shipwrecks that have 
lived in marine-insiu-ance men's memories. One of 
the greatest losses to American marine insiu"ance 
was that of the American steamer Central America, 
which foundered off the Cuban coast in September, 
1857. The Central America was bound from 
Aspinwall, now Colon, to New York, and was 
loaded principally with treasure from the California 
gold-mines. She carried insurance amounting to 
between $700,000 and $800,000, all of which had 
to be paid by American underwriters. Another 
notable loss was that of the steamer Eric, which 
sailed from Pernambuco, Brazil, loaded with coffee, 
on January i, 1893, and was burned at sea. Coffee 
prices were high in those days, and the Erie went 
down with $500,000 insurance. 

Two losses which not only made inroads on the 
American marine companies, but which also seri- 
ously crippled the growth of American steam trans- 
atlantic service, were the sinking of the steamer 

Arctic, off Newfoundland, in 1854, by collision, and 
the disappearance of the steamship Pacific, which 
sailed from Liverpool for New York in January, 
1856, and was never heard from. Both steamships 
belonged to the Collins Line, which was the first 
one to put on steam-vessels for the Atlantic trade. 
These early losses were particularly detrimental to 
American marine insurance, because the companies 
carried extremely heavy lines in those days. Among 
the recent heavy losses was that of the steamer 
Oregon, which was run into and sunk off the Long 
Island coast in 1 886. American marine underwrit- 
ers had between $700,000 and $800,000 on the 
Oregon's cargo. The loss of the Oregon also showed 
underwriters how quickly even a properly con- 
structed iron ship sinks. The introduction of iron 
in place of wood for building vessels has not made 
any material difference in the rates of insurance, for 
iron has hazards which wood has not, and vice versa. 

As to the future of American marine underwrit- 
ing, it is difficult to prophesy. As trade follows the 
flag, so marine insurance flourishes in the country 
with a prosperous merchant marine. The United 
States is again forging to the front as a great ship- 
building nation, and this gives American marine 
underwriters hope that American marine insurance 
may follow in the wake of the growth of American 
ship building. 

The United States census of 1890 gives the sta- 
tistics of the fire-insurance interest at the close of that 
year, which may be found in the table on page 6, 

The following classification is employed in that 
table : 

Class I. — Companies having a joint-stock capi- 
tal, and doing either a fire, ocean marine, or inland 
navigation and transportation insurance business. 

Class 2. — Companies having guaranty capital, and 
doing either a fire, ocean marine, or inland naviga- 
tion and transportation insurance business. 

Class 3. — Companies doing a fire-insurance busi- 
ness on the mutual plan and insming only manufac- 
turing property. 

Class 3 A. — Companies doing a marine-insurance 
business on the mutual plan and insuring ocean-ma- 
rine risks. 

Class 4.— ^Companies doing a fire-insurance busi- 
ness on the mutual plan and insuring all kinds of 
property on land. 

Class 5. — Companies doing a fire-insurance busi- 
ness on the mutual plan and insuring only dwellings 
and contents and farm property. 



IT is a singular fact that the doctrine of chances, 
upon which the science of life-contingencies is 
based, had its origin in the solution of problems 
connected with games of hazard. It happened in 
this way. In the year 1654, the Chevalier Mere, of 
Paris, an ardent gamester, applied to the celebrated 
Abbe Pascal for solutions of two problems for which 
he himself was unable to find answers. 

His first problem was to ascertain in how many 
casts of two dice one might bet with advantage that 
two sixes would be thrown. The second was to find 
a rule for dividing the stakes between two players, 
should a game of hazard be interrupted, in the exact 
proportion to their relative chances of winning at 
the moment of interruption. Pascal considered all 
possible combinations in casts of two dice, and all 
possible changes which might occur in an unfin- 
ished game, and was thus enabled to solve the two 
problems. He illustrated his solution by casts of 
dice. While in a single cast the chance that an ace 
would be thrown is just one out of six, in a suffi- 
ciently large number of casts the number of aces 
would be precisely one sixth of the whole number. 
Generalizing, Pascal proved that, by observing a 
sufficiently large number of happenings in the past, 
he could, with great precision, predict the number 
of happenings which would occur under similar cir- 
cumstances in the future, and he thus enunciated 
the theory or doctrine of chances. Thus, if it were 
ascertained that out of a large number of persons 
of a given age, similarly situated as regards health, 
occupation, chmatic influences, etc., a certain num- 
ber had died in one year, the percentage of deaths 
in a given time, under similar circumstances, could be 
predicted with precision, provided the number were 
large enough to secure a proper average. Hence 
the solution of problems connected with trivial games 
of hazard led to the discovery of the laws of chance, 
upon which, as an exact science, was built up not 
only the theory of life-contingencies, but also of 
all astronomical calculations. By means of careful 

observations as tp the rates of mortality which have 
prevailed among a vast number of insured lives, at 
all ages and in different circumstances, we can fore- 
tell, with almost absolute accuracy, the rates of 
mortahty which will be experienced under similar 
conditions in the future. In other words, while 
nothing is more uncertain than the duration of a 
single life, nothing is more certain than the number 
of deaths which will happen in a given time, among 
a large number of persons under known conditions. 

Hence life-insurance has for its basis an exact 
science, depending upon inflexible laws of nature; 
so that it has been well said by the late Professor De 
Morgan, of London, an eminent authority, " There is 
nothing in the commercial world which approaches, 
even remotely, the security of a well-established life- 

In an abstract or mathematical sense, life-insur- 
ance is a bet or a series of bets. The individual 
bets the insurance office that he will die within one 
year ; the office bets the individual that he will not die 
within that time. The stakes, called the premiums, 
are accurately and equitably adjusted — one is bound 
to win, the other to lose. The office gives to the 
individual the right to make a series of similar bets 
during each of the remaining years of his life, or for 
a limited period. 

In a concrete or moral sense, hfe-insurance is pre- 
cisely the reverse of gambling — unless, indeed, the 
individual who neglects to protect those dependent 
upon him from pecuniary loss in the event of his 
own death, and thus assumes the risks of loss to 
them, is a gambler. 

Life-insurance is one of the most beneficent de- 
vices of modern civilization. By its means the 
pecuniary loss and hardship which would result to a 
family from the death of its natural protector are as- 
sumed by a vast number of persons, upon each of 
whom such loss falls lightly. It is benevolence 
without ostentation, and charity without humihation. 
It is practically a fulfilment of the divine injunction 




to " bear one another's burdens," and is therefore an 
evidence of the highest Christian civilization. 

Important as was this discovery by Pascal, it 
attracted but httle attention until 167 1, when the 
Grand Pensionary De Witt, of Holland, celebrated 
alike as a statesman and a mathematician, conceived 
the idea of applying the doctrine of chances to the 
valuation of annuities. From the registers of births 
and deaths in several towns in Holland he deduced 
rates of mortality, or probabilities of living and dy- 
ing for each age. In a report to the States-General 
in April of that year he computed the value of 
annuities for the several ages. This report is valu- 
able as the first instance of the application of scien- 
tific principles to the solution of questions depending 
upon the contingencies of living and dying, com- 
bined with the improvement of money by interest. 
De Witt's report was lost to the public for one 
hundred and eighty years, or until 185 1, when it 
was recovered through the perseverance and skill 
of Mr. Augustus Hendricks, actuary of the London, 
Liverpool and Globe Insurance Company, and at 
one time president of the Institute of Actuaries, 

In 1693, the illustrious Halley, astronomer royal 
of Great Britain, constructed the first complete 
table of mortality, in a form which has ever since 
been followed, showing for each age the chances of 
living and dying, with various monetary values de- 
duced therefrom. Halley's table was based upon 
the records of births and deaths in London and in 
Breslau. It was more than half a century afterward 
before Halley's labors were applied to any work of 
importance. As life-insurance became better known 
and appreciated the necessity of accurate tables of 
mortality became more evident. The following list 
comprises the principal mortality tables which have 
at any time been used by life-insurance companies : 

1. The Northampton Table, based upon an enu- 
meration of the deaths in that town for the forty-six 
years prior to 1780, constructed by Dr. Richard 
Price. As the number of persons living in these years 
was not known, but merely assumed, this table was 
quite inaccurate ; yet it was used as a basis of values 
for many years by insurance companies, and by 
courts of law in the determination of insurance pre- 
miums, annuities, and rights of dower. It was used 
in the determination and distribution of the surplus 
of the Equitable, of London, as late as the year 1889. 

2. The Carlisle Table, based upon the numbers of 
both living and dying in the city of Cariisle during 
eight years prior to 1787. This table was con- 
structed in 1815 by Joshua Milne, actuary of the 

Sun Life-Office, and was, for a full half-century, the 
standard adopted by British and American life- 
insurance companies. A great variety of monetary 
values were computed upon this table, and a vast 
number of insurance contracts were based upon it 

3. The Actuaries' or Combined Experience Table, 
deduced from the mortality of seventeen British life- 
insurance companies, embracing 83,905 assured 
lives. This table was constructed in 1845, ^y the 
late Jenken Jones, actuary of the Guardian Assur- 
ance Company. It is valuable as being the first 
important table based upon the actual mortality 
among persons whose Uves were insured. Although 
the Actuaries' Table has long since become obsolete 
in Great Britain, it has been adopted, and is still used, 
as the official standard of valuation by Massachu- 
setts and by several other state insurance depart- 

4. The HM (Healthy Male) Table, based upon 
the later experience of twenty British companies, em- 
bracing the mortality among 147,000 insured lives, 
and completed in 1869, under the supervision of a 
committee of the Institute of Actuaries. Elaborate 
monetary values have been computed upon this 
table, which are embodied in the " Text-book " by 
George King, actuary of the Atlas. This table has 
long been the vade-mecum with actuaries, and until 
it shall be superseded by tables based on later and 
more extended observations will be the most rehable 
standard of value in Great Britain. 

5. The American Experience Table (so called), 
constructed by the writer, and based upon the 
mortality experience of the Mutual Life-insurance 
Company, of New York, during its first fifteen years. 
Confirmed as it has been by later and more exten- 
sive observations upon the mortality in that and in 
other American companies, this table is unquestion- 
ably the best exponent of rates of mortality which 
may be expected to prevail among insured lives in 
the United States. Rates of premium and estimates 
of the value of contingent insurance liabilities in 
nearly all American companies are based upon this 
table, which is also the official standard of insiuance 
valuations in many of the States. 

The origin of life-insurance is lost in antiquity. 
At a very early period the lives of masters of vessels 
and of merchants voyaging with them were insured, 
always for brief periods and generally by individual 
underwriters, against death or captivity by pirates. 
In the middle of the sixteenth century, lives of persons 
were insured for short periods by individual under- 
writers, who divided the risks among themselves 
very much in the manner of the modem Lloyd's. 

Sheppard Homans. 



The earliest life-insurance policy on record was 
issued June 15, 1583, by the Office of Insurance 
within the Royal Exchange, London, upon the life 
of one William Gybbons. The insurance was for 
twelve months for ^^38^ 6s. Sd., at a premium of 
eight per cent. The policy was underwritten by 
thirteen different persons, who guaranteed sums 
varying from ^2e^ to j^^o each. The oldest exist- 
ing office, which transacted at any time a life-insur- 
ance business, is the Hand-in-Hand, London, char- 
tered in 1696 ; but its first life-insurance policy was 
not issued until 1836. The earliest purely life- 
insurance company was established in 1699, under 
the name of the Society of Assurance for Widows 
and Orphans. This association had a brief exis- 
tence. The celebrated Amicable Society for a Per- 
petual Assurance was chartered March 25, 1706, 
by Queen Anne. This society carried on the busi- 
ness of life-insurance for one hundred and sixty years, 
or until 1836, when, under an act of Parliament, it 
passed out of existence as a separate institution and 
was merged into the Norwich Union Life-Office. 
In the year 1721, there were founded two insurance 
offices, still existing, the Royal Exchange and the 
London Assurance Corporation, each of which at 
once issued life-policies, and each has continued to 
do so until the present time. They are therefore the 
oldest existing offices writing life-insurance contracts, 
but their principal business has always been that of 
marine and fire insurance. All of the offices above 
named charged a uniform rate of premium for all 
ages of about five per cent, until after the com- 
mencement of the present century, and their business 
was conducted upon methods very similar to those 
practised by modern assessment associations. 

In 1762, the famous Equitable Society for the 
Assurance of Life and Survivorship, of London, 
commenced business. This society was founded 
upon the recommendation of Dr. Richard Price, 
with the view of charging rates of premium adjusted 
to chances of living and dying at the different ages. 
In other words, its business was from the first con- 
ducted on sound principles. The society has had 
from the outset a phenomenal success. It has never 
employed agents or paid commissions or solicited 
business. It has always been managed with great 
ability, and is still pointed out with pride as the 
" Old Equitable." It has led the way in many of 
the advances and improvements in the system. In 
the amount of business transacted it has been dis- 
tanced by many modern offices ; and although its 
volume has greatly diminished since its maximum, 
about 1 816, it is now increasing quite rapidly. The 

Equitable, of London, is not, however, as has gen- 
erally been assumed, the oldest office in existence 
doing a purely life-insurance business. That honor 
is due to a little American office in Philadelphia, Pa., 
called the Presbyterian Ministers' Fund, organized 
in 1759, or three years before the Equitable, of Lon- 
don. It has, for one hundred and thirty-six years, 
pursued quietly, unostentatiously, and without in- 
terruption the business of life-insurance. In the 
Papers and Transactions of the Actuarial Society of 
America, No. 2, page 83, maybe found a facsimile 
of a poHcy issued by the Presbyterian Ministers' 
Fund, dated May 22, 1761, on the hfe of Rev. 
Francis Allison. In consideration of a premium of 
^6 annually, it provided for the payment, after his 
death, of;^2o annually, for a stated number of years, 
to his widow and orphans. The premiums were 
based upon the hypothesis of De Moivre, the rates 
being level for life. It is, therefore, the oldest 
purely life-insurance company in existence. It has 
ever kept pace with modern improvements in the 
science of life-contingencies, and is to-day in a sound 
condition, with every prospect of continued success. 

After the formation of the Equitable, of London, 
in 1762, came the PeHcan, in 1797, the London, the 
Provident, and the Rock, in 1806, and new offices 
were started in almost every subsequent year. There 
were founded during the present century, in Great 
Britain, about three hundred and seventy life-offices, 
out of which only eighty-eight, according to the 
Parliamentary Return for 1894, remain. The others 
have had, generally, an ephemeral existence. Some 
have been wound up voluntarily, some by processes 
of law, some have been merged into stronger or 
better-organized institutions, and all have suffered 
penalties from the violation of sound principles of 
science and commercial experience. 

On the continent of Eiuope, life-insurance has 
been a plant of slower growth and development. 
Many strong offices have been built up in France, 
Germany, Holland, Belgium, and Austria, with a few 
in the other kingdoms. It is in the United States 
and in Great Britain, however, that the system has 
flourished and attained its highest development. 

In the United States, the Presbyterian Ministers' 
Fund was, as stated, organized in 1759, and is still 
in existence. The Baltimore Life was organized in 
1 83 1, and was merged into the Equitable in i860. 
But modern life-insurance dates from 1843, when 
the Mutual Life-insurance Company, of New York, 
first commenced business. This great company, in 
volume of assets the largest in the world, issued its 
first policy February i , 1 843. It is organized upon 



the mutual plan, having no capital, and its enor- 
mous accumulations ($203,822,134 on December 
31, 1894) have resulted entirely from insurance 
premiums and interest thereon, after deducting pay- 
ments for death-claims and expenses. 

This company was organized by friends of the late 
Morris Robinson, solely to give a position to that 
gentleman. Its affairs were managed with great 
skill by him and by his successors in the office of 
president, the late Joseph B. Collins and Frederick 
S. Winston. Under the present incumbent, Mr. 
Richard A. McCurdy, the business and accumula- 
tions are rapidly increasing. The history of the 
Mutual Life-insurance Company is a record of 
phenomenal success, resulting from the application 
of science and sound business principles to the most 
important economy of modern times, by men of ex- 
ceptional ability, energy, and business training. The 
American Experience Table of MortaHty, so called, 
constructed, in 1858, by the writer, and since adopted 
by all American companies and by many of the 
States as a standard of valuation for premiums and 
liabilities, was deduced from the mortality records 
of this company. The " Contribution Plan " of 
dividing surplus equitably among the members of 
a life-insurance company was first applied by the 
writer in the distribution of the surplus of the 
Mutual Life in 1863. When we consider the vast 
amount of surplus now held for policy-holders by 
American companies, amounting to more than 
$112,000,000, in addition to over $325,000,000 of 
surplus already awarded and paid to them under 
the " Contribution Plan," one may appreciate its 
importance and value. 

In the report of the Massachusetts Insurance 
Department for 1868, the commissioner, Hon. John 
E. Sandford, states : 

" The forty -seven life-insurance companies doing 
business in this State, or rather twenty-one of them, 
were fortunate enough to find themselves during the 
last year in possession of divisible surplus to the 
amount of more than seven and one half millions of 
dollars ($7,595,671.97). The whole of this magnifi- 
cent fund was made up of the overpayments of in- 
dividual policy-holders, or was the surplus earnings 
of their money held in reserve by the companies. 
They were consequently entitled to have it divided 
among them by some rule or method of distribution. 
The propriety of so dividing it that each policy- 
holder should receive his own — the share of it which 
belonged to him, neither more nor less — is too plain 
to need argument or illustration. 

" How, then, shall it be divided? This is not a 

question of usage, of precedent, or of convenience, 
but of equity and right — of right to property, to 
one's own money ; and involving, as it does, millions 
of dollars annually, it is a question of the first 

"As a practical question, at the present time, it 
resolves itself into the discussion of two essentially 
different methods of distribution, which, with some 
variance of detail, appear to divide the practice of 
all the mutual companies. ( i ) The ' Percentage 
Plan' distributes the surplus by a uniform percen- 
tage of the annual premium — assuming, apparently, 
that this premium fairly represents, for the current 
year, the whole capital or stock in trade of each 
poHcy-holder in the joint concern, on which his 
share of the profits or savings for the year is to be 
computed. There is no other assumption on which 
such a mode of distribution is inteUigible. (2) The 
' Contribution Plan,' rejecting the annual premium 
as the measure of distribution, inquires for the 
sources of the surplus — how much of it is traceable 
to the surplus earnings of each one's share in the 
accumulated reserve of previous years, as well as of 
the current premium, and how much to each one's 
share in the savings on the payments for losses and 
expenses — and professes to return to each what he 
or his money has actually contributed to make up the 
sum total of the surplus which is to be divided. If 
one of these methods is right in principle, and the 
other wrong — and they cannot both be right — the 
sooner it is known and admitted the better. 

"We think it admits of demonstration that the 
percentage plan ignores the origin of the surplus ; 
that its idea is radically wrong, and discordant with 
the theory and methods of life-insurance; that it 
gives money which belongs to one policy-holder, 
without reason or right, to another, subtracting 
from the dividend to which the longer insured is 
entitled, to make for the newly insured an equal 
dividend to which he is not entitled ; that it does this 
uniformly and inevitably, and does it on an extensive 
scale. The equity of the uniform percentage plan 
in dealing with the money of the insured is like the 
hospitality of the famous old robber of Attica, who, 
if the legs of his unwilling guests were too long for 
his bed, lopped them off, and stretched them to the 
requisite length if they were too short. 

"The contribution plan, on the other hand, 
recognizes the constant sources of surplus — a 
higher rate of interest than was assumed, a lower 
rate of mortaHty than was expected, and a less 
percentage of expense than was provided for — in 
establishing the premiums and reserve of the com- 


pany. These sources yield a surplus which varies 
with the reserve on each poHcy, with the age of the 
insured, and with all the terms and conditions of the 
insurance. The system adapts itself to the incidents 
of each policy, and returns the surplus earnings from 
interest, and the excess of the payments for mortality 
and expenses, which belong to it. In a word, it 
seeks to give to each of the insured the siuplus which 
his money has earned or created. It requires no 
other statement than this to demonstrate its theoreti- 
cal equity. The actual adaptation of the plan is 
demonstrated by the fact that its formulas are de- 
duced from and harmonize with the fundamental 
processes of life-insurance, while no mathematics 
either suggest or justify the percentage plan. 

" In this country, where every improvement is 
eagerly sought and usually accepted, its essential 
features have received the indorsement of the most 
eminent actuaries, and it has been already adopted 
by a majority of the participating companies. The 
statutes of this State have been amended in order 
to admit of its adoption by our own companies. 
Actual trial, which is the best test of its merits, 
seems to have approved its equity and the practica- 
bility of its use. Other companies, whose practice 
has sanctioned thus far the older plan, are known to 
be considering seriously its adoption. A firm belief 
in its superior equity and in the general good results 
to be expected from its use cannot fail to induce the 
hope that this, with every other improvement that 
science or experience suggests, may be ingrafted on 
a system whose present success and beneficent future 
are cherished and believed in with a strong and 
abiding faith. Life-insurance claims an alliance 

duce the system of non-forfeiture, since adopted by 
all other American companies. By this concession, 
policy-holders, who are unable or unwilling to con- 
tinue their contracts, are guaranteed an equitable 
surrender-value in paid-up insurance or in cash. The 
company owes its success largely to the ability and 
energy of its former president, the late William H. 
Beers. Under its present able executive, the Hon. 
John A. McCall, its business is growing with great 

The Equitable Life-Assurance Society of the 
United States was organized in 1859, by Mr. Henry 
B. Hyde, who, although declining to be its first 
president in favor of Colonel William C. Alexander, 
has been the guiding spirit from its organization to 
the present day. Under the superb management 
of Mr. Hyde, the Equitable has siu-passed its two 
great rivals, the Mutual and the New York Life — 
which started respectively sixteen and fourteen years 
prior — in the items of income, volume of business, 
and surplus. In one respect the Equitable is unique 
among all large life-companies, and that is in the 
fact that it has always remained under the manage- 
ment of one man from its organization to the present 
day. These three American offices are by far the 
largest in the world. Want of space prevents men- 
tion of other American life-companies by name. 

The remarkable progress of life-insurance in the 
United States may, perhaps, be best illustrated by 
the following statistics, compiled from the reports of 
the Insurance Department of Massachusetts for the 
years ending December 31, 1859, and December 31, 
1894. The list includes all companies which re- 
ported to that department at the two dates named. 


Amount Insured. 






Premium Income. 



Surplus — Combined Ex- 
perience. 4 per Cent. 



New England Mutual . 

State Mutual 


Massachusetts Mutual 
Mutual Life, N. Y. . . . 
Mutual Benefit, N. J. . 
Connecticut Mutual . . 
National, Vermont . . . 

Union Mutual 

Manhattan, N. Y 

Equitable, N. Y 





































































with interests too high and sacred to be persistently 
guilty of systematic wrong." 

The New York Life-Insurance Company com- 
menced business in 1845. It was the first to intro- 

Among the early workers and fathers of American 
life-insurance who are no longer living, special honor 
should be given to Judge Phillips of the New Eng- 
land; Guy R. Phelps of the Connecticut Mutual; 



Morris Robinson, Frederick S. Winston, Henry H. 
Hyde, and Professor Gill of the Mutual Life; 
Joseph L. Lord of the Mutual Benefit ; William H. 
Beers of the New York Life ; and last, but not least, 
the late Elizur Wright, the first insurance commis- 
sioner of Massachusetts. 

There is one specialty in the larger American 
companies which is worthy of attention, and that is 
the very large amount of insurance written upon 
tontine plans. Tontine assurance, as now written, 
is simply an agreement by which surplus is retained 
and accumulated for the exclusive benefit of those 
policy-holders who survive and keep in force their 
policies until the end of the tontine period agreed 
upon — generally ten, fifteen, or twenty years. 
Upon ordinary plans the surplus is divided an- 
nually; 'upon both plans the full sum insured is 
always payable at death. 

Life-insurance is, in effect, an arrangement or de- 
vice by which the pecuniary loss to family or de- 
pendents, which would result from the death of their 
protector, is borne by a large number of associates, 
upon each of whom the burden or loss falls but 
lightly. In the case, however, of a person who dies 
after paying one premium, or only a small number 
of premiums, the pecuniary gain to his beneficiaries 
is abnormally great, since the amount of insurance 
is very large in comparison with the premiums paid 
therefor. To pay dividends, in addition to the in- 
surance in such cases, only aggravates the relative 
inequality between persons dying early and those 
who live longer and pay premiums for many years. 
The tontine system, by awarding and paying sur- 

such a large number of applicants prefer and select 
tontine policies may be considered a proof of the 
confidence of the companies and of their patrons in 
the system. In the volume of business the tontine 
companies surpass by far the companies which refuse 
to issue that class of policies. Incidentally, it is 
claimed that lapses are fewer among tontine than 
among ordinary policies, and that there is a great 
advantage to those who survive the tontine period 
in the opportunity of closing their contracts by re- 
ceiving their full equities both of reserve and surplus 
in cash or in paid-up insurances, or of continuing 
their poUcies with greatly reduced premiums. 

While many companies in the United States have 
failed and been wound up, those now doing an ac- 
tive business are believed to be on a sound, healthy 
basis. The cause of failure in almost every case 
may be traced to extravagance or inexperience, but 
not to excessive mortality in any instance. There 
are at present, in the United States, fifty-six regular 
old-line life-insurance companies, of which thirty- 
two only are authorized to transact business in the 
State of New York. The companies not admitted 
to that State, however, are mostly small and unim- 
portant. The magnitude of the business in the 
thirty-two old-line companies doing business in 
New York may be seen by the following statistics, 
taken from the report of the Insurance Department 
for the year 1894. The statistics for the British 
offices (counting five dollars to one pound) were 
taken from the Parliamentary Return for 1894, 
published in 1895. The business of industrial 
companies is omitted in both cases. 


Total insurance in force, December 31, 1894 

Total number of policies in force, December 31, 1894 

Total income from premiums, 1894 

Total income from interest, etc., 1894 

Total income from all sources, 1894 

Payments for death-claims 

Payments for commissions $29,854,751 

Expenses of management 13,672,918 

Total $43,527,669 

Total liabilities, December 31, 1894 

Total surplus, " " 

Total assets, " " 

Total number of companies reporting 

united states. 
(32 Offices Only.) 

Great Britain. 














plus to the latter class only, equalizes these otherwise 
unavoidable and unforeseen inequalities. Moreover, 
each person should be allowed full liberty in the 
choice of different forms of insurance, and so-called 
tontine companies issue all kinds. The fact that 

In addition to the fifty-six regular old-Hne com- 
panies, there are, in the United States, several hundred 
cooperative or assessment companies, fraternal and 
secret associations, in which, generally, the promise 
to pay the sum insured in case of death is not def- 



inite and absolute, but is made contingent upon the 
result of assessments to be collected from survivors. 
The exact number of these organizations, with the 
number of members and the total amount of insur- 
ance, cannot be given, but the total insurance in 
force no doubt exceeds eight and one half billion 
dollars at the present time, or nearly double the 
amount outstanding in all the regular life-insurance 

Insurance in the old-line companies is secured, 
almost invariably, through the intervention of soHcit- 
ing agents or canvassers, who are compensated by 
commissions on the premiums collected. Men, as 
a rule, will not seek life-insurance as they seek fire 
or marine insurance upon their houses and merchan- 
dise. They require the urgent solicitations of can- 
vassing agents to persuade them to do what every 
one, who has a family dependent upon his exertions, 
should recognize as a duty and a privilege. In the 
cooperative or assessment companies the expense of 
procuring business is less, but the quality of the 
insurance is inferior. 

In one respect, life-insurance in the United States 
differs in a remarkable degree from that in Great 
Britain, and, in fact, from that in all other countries. 
Each of the United States, in the absence of legis- 
lation by the national government, has power to 
impose restrictions, conditions, and taxes upon 
corporations of every other State seeking to do 
business within its precincts. Each State has its 
own Insurance Department and its own statutes reg- 
ulating life-insurance. In consequence, the policy- 
holders of life-insurance companies are subjected to 
great hazard, inconvenience, and expense by reason 
of diverse and oftentimes incongruous legislation. 
The burden imposed upon the management of our 
life-insurance companies by reason of the require- 

ments of the different States, and of the necessity 
laid upon them to protect the interests of the policy- 
holders by guarding them against unfavorable and 
unwise legislation, is very serious. 

In striking contrast with the American system of 
State supervision by legislative enactments is the 
system adopted in Great Britain. There the com- 
panies are required simply to file with the Board of 
Trade sworn statements as to the amount of assets, 
of income, and of liabiHties, giving the table upon 
which such liabilities are computed ; and the public 
is left to find out their relative merits or standing by 
such illumination as active competition and pubHc 
information may bestow. No attempt at super- 
vision of companies is made, and in Great Britain 
no tax is laid upon life-insurance. It is there as- 
sumed, and very justly, that life-insurance is a pub- 
Hc benefaction ; that it tends to promote thrift and 
economy on the part of its citizens, and to avoid 
the burden of paupers upon the state, and as such 
should be fostered and encouraged by every proper 

In other words, life-insurance in the United States 
is the subject of supervision and tax by our legisla- 
tive Solons, while in Great Britain publicity and 
natural competition are relied upon to keep the 
companies in sound condition. The two methods 
are in sharp contrast. It cannot be denied that the 
American system has one advantage in the complete 
published returns, even to the minutest detail, of the 
items of assets, liabilities, and methods of business, 
which are open to the inspection of the public. 
American companies are thus enabled to dispel 
honest doubts and disarm designing criticism by 
the simple logic of facts, and to demonstrate be- 
yond question their claims to the confidence of the 



DYNAMICS has never produced a greater 
power than the locomotive engine. Stephen- 
son's Rocket drew in its train results more 
momentous in their relation to human destiny than 
any motive force the world has ever known. To- 
day, railroads, their achievements and their prob- 
lems, are of vaster importance than any other one 
factor in economic affairs. Evolved from the dis- 
coveries that found steam a force and harnessed it, 
through the means of appHed mechanics, their de- 
velopment has produced those marvelous feats of 
constructive and engineering skill which distinguish 
both them and the age alike. Their extension has 
blazed the path of progress, and as they have built 
up, so have they bound, the new sections to the old, 
until beneath their network has broadened homo- 
geneously the greatest nation on the face of the 

Transportation, whether of the person or of prop- 
erty, with ease, speed, and safety is the first and 
most self-evident of the achievements of the rail- 
road. In the administration and regulation of this 
function questions have arisen, legislation been 
framed, and experiments made during nearly thirty 
years, but with small beneficent result. In the mists 
of the discussion thus raised the " railroad problem " 
has ever loomed larger and more distorted than it 
should appear. Primarily the railroad is based upon 
certain broad and immutable principles underlying 
the commercial and industrial system, as an integral 
part of which its dependence should be at once ap- 
parent. That such has not been universally recog- 
nized is due to two causes : first, few people except 
those whose interests and prejudices have moved 
them strongly either to one side or the other have 
ever investigated the matter to its ultimate conclu- 
sions ; second, the railroad system itself, in the strong 
throes of its formative period, has sometimes seemed 
to deny its manifest destiny. Unrestrained and 
ruinous competition, reacting upon itself, has forced 

rate wars and discriminations, confined to no one 
locality or territory, but threatening even such results 
as the diversion of the nation's commerce. That 
this period, now approaching its end, should give 
way to better conditions and wiser policies is as in- 
evitable as that iron rails should give place to steel. 
Potent as the railroad is, it must conform to rather 
than make conditions. The New York merchant 
will trade with Chicago if transportation rates leave 
him a profit; if they do not, his business with 
Chicago ceases, and the carrier loses. From this it 
follows that, within the limits of a just and reason- 
able freight tariff, the equalizing laws of trade must 
determine conditions for the railroad. With this 
elementary principle in mind, the "railroad prob- 
lem " loses many of its difficulties ; but it is not the 
purpose of this article to discuss this question further, 
except as its effects are seen in tracing the history 
of the system's development. 

The first railroad commonly claimed to have been 
built in America was in Massachusetts, and ran 
from the Quincy granite quarries to tide-water at 
Neponset, a distance of three miles. It was com- 
pleted in 1826, at a cost of $34,000. Candor com- 
pels the statement that this much-vaunted bit of 
road was neither more nor less than an ordinary 
tramway for horse-power, such as had been common 
at the English coal-mines for many years before that 
time. Waiving, then, the claims of the Quincy 
road, as well as those of the Mauch Chunk switch- 
back road, built in 1827, the record shows the first 
railroad in this country really entitled to be called 
such, and the first on which a locomotive was actu- 
ally run, to have been the Carbondale Railroad, 
built in 1828, by the Delaware and Hudson Canal 
Company, from their coal-mines to Honesdale, Pa., 
a distance of sixteen miles. In 1829 a locomotive 
built in England from the plans of Horatio Allen, 
an American engineer, was brought over, and in 
August commenced running regularly on this road. 




That locomotive, called the Stourbridge Lion, was 
the first ever used in the United States, and was 
imperfect even for those times. The multitubular- 
boiler engines which succeeded this type were per- 
fected by Stephenson, and the Rocket, the first of 
this new class, was successfully tested over the Rain- 
hill track in the same year. 

The Rocket was to the railroad what the Clermont 
was to steam-navigation, and to its inventor, as to 
Fulton, should be accorded the full measure of glory 
for the achievement. At the same time, in this case 
again, as in that of Fulton, the idea thus perfected 
and demonstrated practicable was not a new one. 
Little known as the fact is generally, an American 
was the first to conceive the locomotive engine. 
His name was Oliver Evans, and in Philadelphia 
he perfected in 1782 a steam-carriage, consisting of 
a high-pressure engine placed on wheels. This 
machine, when exhibited during that year, was 
found capable of running a mile and a half at a 
single stretch. From this time the records show no 
further attempts in this direction for twenty years, 
or until 1802, when Richard Trevethick, an English- 
man, patented a self-acting steam-engine, capable 
of drawing a light load at the rate of five miles an 
hour. Two years later this engine was put in use 
at the Merthyr-Tydvil mines ; and the demonstration 
in 181 1, by Mr. Blackett, an English coal propri- 
etor, that weight and friction would suffice, even 
with smooth wheels and rails, to render the steam- 
engine self-motive on grades or with heavy loads, 
caused the further introduction of short lines at the 
mines. The final triumph in locomotive engineer- 
ing, and the one which made possible a speed and 
draft-power of practical utility, was reserved for 
George Stephenson, the rough and unlettered North- 
umbrian miner. Passing over his earlier struggles 
and partially successful models, we find the Rocket, 
in 1829, standing boldly forth as the alpha of the 
modern railroad. 

The first American locomotive did not appear for 
nearly a year later, and was but a diminutive affair. 
It was called the Tom Thumb, and its inventor was 
no less distinguished a personage than the late Peter 
Cooper. The boiler of the Tom Thumb, although 
little larger than that of an ordinary kitchen range, 
was provided with vertical tubes, thus seciuring the 
necessary heating surface ; but the waste-steam blast 
of Stephenson was replaced by a primitive bellows- 
like contrivance worked by a drum, with a belt 
which passed over one of the wheels of the carriage. 
Notwithstanding its crudity, this little locomotive, 
which was run by its inventor over the tracks of 

the Baltimore and Ohio, — then operated by horse- 
power, — was capable of a very fair speed. 

Mr. Cooper's retirement as a locomotive engineer 
came about too speedily, however, for his genius in 
that line to be thoroughly tested. It was due to an 
amusing circumstance, which caused the late ven- 
erable philanthropist much mortification for many 
years. While out with a party of friends exhibiting 
the Tom Thumb, Mr. Cooper met, at a spot where 
the road and railroad tracks paralleled each other, 
the proprietor of the great stage-coach line of that 
part of the country. This gentleman, who was 
waiting with one of his fleetest trotters, proceeded 
to demonstrate the superiority of horse-flesh over 
steam. He would scarcely have been able to do 
this but for a mishap, as Mr. Cooper fired up his 
tiny furnace and ran steam far above license limits, 
while the diminutive Tom Thumb trundled along at 
a rate that after the first quarter was placing steam- 
power well in the lead. Slowly the engineer-fire- 
man-inventor saw his engine drawing away from 
the wearied horse, and victory seemed certain, when 
suddenly the belt, before mentioned, ran off the 
drum, the fires slackened, and the race was lost. 
Mr. Cooper felt his defeat keenly. 

The second American locomotive was built at the 
West Point Foundry near Cold Spring, N. Y. (where 
the Parrott guns were cast during the War of the 
Rebellion), after plans by E. L. Miller, and was 
equipped with a common vertical boiler. Despite 
this drawback, this locomotive, which was called 
the Best Friend, did attain, unattached, a speed of 
thirty to thirty-five miles an hour, and with a train 
of five cars fifteen to twenty miles. This locomo- 
tive was built for the South Carolina Railroad, which 
ran between Charleston and Hamburg, and with the 
consideration of which is fairly begun the history of 
American railroads. 

On the fifteenth day of January, 1 831, or precisely 
four months after that memorable day when George 
Stephenson, standing on the foot-board of the 
Northumbrian, had started the first train, on board 
of which was the Duke of Wellington, over the 
Manchester and Liverpool Railroad, the stockhold- 
ers of the South Carolina Railroad celebrated the 
first anniversary of the opening of their road by 
introducing steam motive power. The Best Friend 
was the locomotive, and by means of it a train of 
two pleasure-cars, carrying a band and 150 stock- 
holders, together with a specially fitted up carriage 
bearing a detachment of United States troops and 
a field-piece, went down the road on a grand excur- 
sion. This was the inauguration of the passenger 



railroad system of the country, and it followed very 
closely, as can be seen, upon the English beginning 
made by the Stockton and DarHngton road in 1825. 
The fact that the road was a year old before steam 
was introduced illustrates a point which every stu- 
dent of American railroads has had brought to his 
attention and consideration, viz., that America, as 
though foreseeing the final triumph of the locomo- 
tive, commenced her railroads some time before this 
motive power was developed. As an example of 
splendid assurance, the action of this same South 
Carolina Railroad in voting, on January 14, 1830, 
that " steam " should be the only motive power used 
on the road stands unequaled. Other roads were 
similarly forehanded in laying their tracks in antici- 
pation of the locomotive. The Baltimore and Ohio, 
begun in 1828, was operating by horse-power a short 
stretch of road fifteen miles long, from Baltimore to 
EUicott's Mills, in 1829, and carried as many as 
80,000 passengers and 6000 tons of freight during 
the year 1831. A year later, when the line had 
been extended to Frederick, steam was introduced 
as the motive power. In 1831 the South Carolina 
Railroad had progressed to a point where it origi- 
nated the four-wheel car-truck, and had replaced the 
primitive old Best Friend — which had unfortunately 
suffered from a boiler explosion early in its career — 
by locomotives of more improved construction and 
design. In connection with the apprehension caused 
by the bursting boiler a curious custom developed 
on this road. This was the introduction of a car 
loaded with several bales of cotton, and known as 
the " barrier car," between the locomotive and the 
passenger-cars. Behind this the early Carolina 
traveler felt comparatively safe. 

Among others of the very early roads were the 
Baltimore and Susquehanna, dating from 1830 ; the 
little four-and-a-half-mile line between New Orleans 
and Lake Pontchartrain, starting the same year ; the 
Boston and Lowell, incorporated in 1830; the Bos- 
ton and Providence, and Boston and Worcester, in- 
corporated in 1831 ; and the Mohawk and Hudson, 
which commenced running in September, 1831. 
Of all the early roads this latter is probably the best 
known, through the numerous old prints that have 
been preserved of the De Witt Clinton puffing along, 
with a train of most extraordinary cars in the rear. 
These were nothing more or less than ordinary 
stage-coach bodies mounted on trucks, coupled to- 
gether with chains. The track consisted almost 
universally of wooden rails, laid upon stone or tim- 
ber ties, and having an iron bar or " strap," of from 
one half to five eighths of an inch in thickness, 

spiked along the top on its inner edge, on which the 
wheels ran. The early American locomotive engine, 
of which the De Witt Clinton may fairly be said to 
be typical, was a small, rather rickety affair, weigh- 
ing from three to three and one half tons, with a 
detached tender carrying pitch-pine for fuel, and 
capable, when driven, of making thirty miles an 
hour. The spark-arrester for smoke-stacks was un- 
known, and outside passengers escaped hghtly if 
their clothing caught fire no oftener than once or 
twice during a trip. 

The English locomotives built by George and 
Robert Stephenson at Newcastle-on-Tyne were 
heavier and better machines. The first of these, 
brought here before the Rocket model had been 
perfected, was landed at New York in 1829, and 
set up in an iron-yard on the East River, where it 
was exhibited as one of the mechanical marvels of 
the time. This engine, however, was little, if any, 
better than the home-made ones; but in 1831 there 
was imported another of the improved models, 
which weighed seven tons, and was considered a 
most powerful machine. This engine was for the 
Mohawk and Hudson road, and cost when deliv- 
ered, with all charges paid, $4869.59. Its general 
appearance and effectiveness will be easily imagined 
by those who saw at the World's Fair at Chicago 
the famous old Johnny Bull, of the Camden and 
Amboy line, of historic memory. This engine, a 
great machine in its day, was landed at Philadelphia 
in August, 1 83 1. 

Almost the first improvement made by American 
engineers upon the EngHsh models was the intro- 
duction of the swivel fore-end truck, suggested in 
1 83 1 by Horatio Allen, of the South Carolina Rail- 
road, but first perfected and adopted by John B. 
Jervis on the Mohawk and Hudson road, in the 
same year. This change, so absolutely necessary in 
a country where railroad companies had neither 
money nor time to spend in avoiding heavy gradi- 
ents and sharp curves, gave the American machines 
an advantage over the rigid English locomotive 
which they have ever since maintained. Even to- 
day a billiard-table road-bed is essential in obtaining 
good results from machines of English make. The 
equalizing-lever, patented by Joseph Harrison, Jr., 
of Philadelphia, was the second improvement, and 
was absolutely demanded by the rough-and-ready 
nature of the work required on American railroads. 
It gave greatly increased stability, and lessened to a 
large extent the danger of derailment. The idea of 
two pairs of driving-wheels was patented in 1 836 by 
Henry R. Campbell. 



The railroads of the country were growing, mean- 
while, and those already mentioned and a few others 
were either undertaken or in view within twelve 
months of the day that the Best Friend pulled the 
first passenger-train out of the Line Street station in 
Charleston. In 1830 there were but 23 miles of 
railroad in operation in the United States. Within 
a year this had been increased to 95, and a year 
later still to 229 — a wonderful record, considering 
the undeveloped resources of the country at that 
time. It cannot be claimed that these railroads 
were such as to compare even distantly with those 
in England. They were but primitive constructions 
at the best, cheaply built, poorly equipped, faultily 
designed, and, briefly, such only as a young country 
commanding the crudest of mechanical appliances 
could produce. Then, as in later times, it was the 
practice of railroad managers to construct their lines 
as quickly and as cheaply as possible, leaving their 
improvement to the future, when its necessity should 
have been demonstrated, and the expense could be 
borne by the earnings and surplus funds. This pol- 
icy, avoiding enormous initial outlay, is still working 
itself out, as has been seen so plainly of late years 
in the gigantic undertakings by which the Pennsyl- 
vania road is straightening its crooked course, and 
the New York, New Haven, and Hartford is obvi- 
ating highway crossings at grade. In England, on 
the contrary, construction has always proceeded 
upon a different plan. Heedless of obstacles, re- 
gardless of expense, and careless of time, engineers 
have gone slowly forward. Had Edinburgh and 
London been as far apart as New York and San 
Francisco, they might not yet have had a rail con- 
nection. The Manchester and Liverpool, the second 
English railroad opened, well illustrates this. It 
approached very nearly to those attainments of 
engineering skill which characterize construction to- 
day. George Stephenson, who had invented the 
locomotive, also carried out the building of its path- 
way ; and in this road, with its underground tunnel, 
high embankments, deep cuttings, lofty viaduct, and 
buoyed road-bed across the quaking bogs of Chat- 
moss, he achieved a distinction as an engineer that 
was second only to the greater glory of his mechan- 
ical inventions. 

America, slow though she necessarily was at first 
in developing the resources which were essential to 
perfect railroad construction and equipment, was 
behind no nation in her realization of the economic 
value of this new method of transportation. Her 
initial crudity, even if the circumstances of the time 
did not sufficiently excuse it, may perhaps be par- 

doned when it is considered what sacrifices the pro- 
prietors have made in later years in order to overtake 
and outstrip every other nation on the face of the 
earth. The American railway system stands forth 
to-day as the most stupendous and progressive, and 
among the most perfect, in the world. But this is 
outrunning history. Sixty-five years ago, the great 
mass of the people never dreamed, wonderful as they 
beHeved the railroad to be, of the extended achieve- 
ments of to-day. Only by a few men of great 
minds was the true significance of this new factor in 
affairs properly appreciated. Long after the excite- 
ment and novelty attending the opening of a new 
road or the trial of a new locomotive had worn off 
through the very frequency of its occurrence, they 
were planning and working toward great ends. 
They saw that the canal system must give way be- 
fore the new force as soon as the public needs 
demanded that speed and convenience should 
replace the old-time delays and discomforts. With 
it all, the men who had made New York the great 
commercial center of the country, and who, down 
the long Erie Canal and the broad waterway of the 
Hudson, had led to their city the produce of the 
great central and lake region, then known as the 
West, saw their commercial supremacy menaced. 
Nor did they reaHze the danger more quickly than 
did the enterprising spirits of the other great rival 
seaports — Boston, Philadelphia, and Baltimore — 
recognize their opportunities. The Erie Canal, 
striking to the very heart of the continent on the 
line of least elevation above tide-water, had settled 
the question, until then contested, as to which of the 
great Eastern cities should become the national port 
of entry and distributing center. Away down in 
New Orleans, reaching up with the long arm of the 
Mississippi, as well as in all the Atlantic seaports, 
had been felt the diversion of the stream of Western 
trade ; and it was, in fact, the effort to recover this 
lost ground that caused one of the earliest of the 
railroads, the great trunk-line of the Baltimore and 
Ohio, to be projected. Between Baltimore and her 
hopes, however, stretched the rough barrier of the 
Alleghanies, and the engineering skill of those days 
was scarcely sufficient to compass all at once this 
difficulty. Philadelphia, too, actuated by the same 
motive and attempting reprisal by the same means, 
found herself balked by the same great wall. Still, 
these delays were recognized as being only tempo- 
rary, and already, by 1835, Boston was seen to be 
reaching out over the Boston and Worcester to cross 
the previously supposed insuperable barrier of the 
Berkshire Hills and enter Albany, This, we know, 


was accomplished in 1841 ; but long before that early increase as expressed in percentages is seen 

time, in 1836, the great trunk-line of the Erie Rail- at once. From 1835, when the first 1000 miles of 

way was commenced, and the foundation laid for railroad were in operation, the increase for each 

New York's greatness as a railroad center. The established period of five years varies but little from 

completion of this road to Dunkirk in 1851, and its one hundred per cent, until the time of the Civil War. 

opening for through traffic, marks the inauguration With the railroads of the country thus doubling twice 

of the trunk-Hne system. in every ten years, it is easy to understand that condi- 

Another great railroad power, active during all tions must have been more or less chaotic so far as 

the earlier period in behalf of New York, was the rates and facilities were concerned. Towns reached 

New York Central, which was formed in 1853 by only by a long, tiresome, and expensive wagon-ride 

the consolidation of five small railways. This shows one year were placed in close communication with 

how, before its future great president. Commodore the outside world the next. The communication 

Vanderbilt, entered on his successful career as a naturally established trade relations ; a new market 

manager, others appreciated the axiom that compe- and a new source of supply were concurrently 

tition among railroads cannot exist where combina- developed, and the effect could not be anything 

tion is possible. Commodore Vanderbilt was, how- but stimulating to the industrial condition of the 

ever, well known before that as an important factor country. 

in the business of conducting transportation. In There was much unevenness in this early develop- 

the very earliest days of railroads, when the Boston ment, however, and much inequality ; not only was 

and Providence, in 1835, established the first link in one town favored at the expense of another, but 

the rail connection between New York and Boston, even the favored ones found themselves confined 

his steamboats afforded the complementary trans- within the limits of a system that was ignorant of 

portation. It would be far too tedious, and require coterminous facilities, and jealous to an extreme 

too great a space, to trace in detail the fortunes of degree of joint traffic. In such conditions, there- 

the American railroads through the disconnected fore, it was some time before the many links began 

links of short lines which began in 1831 to spring to realize that they were but part of what must 

up all over the country. As an evidence of the eventually be a great chain. It was not until so 

number and comparative insignificance of these late as i860 that the railroad chain was complete 

roads, it can be stated that in 1832, when the total and continuous along the Atlantic coast and to the 

mileage of the country was only 229, there were no South, and that Bangor, Me., and New Orleans 

less than sixty-seven separate railroad companies in were at last at the ends of a connecting system, 

the State of Pennsylvania alone. In this multiplic- In the West, prior to 1850, there were, broadly 

ity of beginnings a general idea of the growth of speaking, no railroads. The first ones to be built 

the railroads of the United States can best be derived on the farther side of the Alleghanies were, singu- 

from the following figures, which give the total mile- larly enough, in the extreme Southern States of 

age of the country by demi-decades from 1830: Louisiana and Mississippi. These roads were the 

Clinton and Port Hudson, incorporated in 1833, 

MILES OF RAILROAD^ IN^OPERATION FROM ^^^ the Bayou Sara and Woodville road, incorpo- 

Y^^^ Miles IN rated as the West Feliciana Railroad Company in 

1820. DERATION. 1 83 1 . They were operating before 1 840, and have 

^^35 1.09I continued ever since, enjoying the distinction of 

1840 2,818 . , ^ 

1845 4.633 bemg the pioneer Western railroads. For ten years 

^ll° 9.021 thereafter no new ones entered the field, but by the 

1855 18,374 ' ^ 

i860 30,626 middle of the next decade a network of them was 

{3-^ t2 022 stretching across the face of the great central region. 

1:875 74.096 A system of land grants did much to foster this 

1885 ..............'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'..'.'..'.'.'.'. 12^)361 growth in the West. The general government 

'890 166,706 allotted certain alternate sections of the public lands 

1892 ..'................"..'....'.'.'.'...'.'.'.'. 174750 to the several States in the West, and these States 

*f93 170,607 ceded them under certain conditions, in the nature 

1094 . . 175,441 . . „ 

of a subsidy, to the railroads. The Illinois Central 

Omitting for the present the consideration of the and the Mobile and Ohio were the first railroad 

later figures, the proportionate importance of the corporations to gain the advantage of these grants. 



It was during this period that the far-reaching 
effects of the railroads began to be appreciated in 
the fuller significance to which their extension has 
brought them to-day. 

The intervention of the five years of war and 
turmoil which came coincidently with this realization 
prevented the immediate carrying out of the plans 
then formed. Nevertheless men were planning all 
through that dark and disturbed time, laying the 
foundations of those gigantic undertakings the be- 
ginnings of which were made almost before the 
dawn of peace at Appomattox was saddened by the 
death of Lincoln. By 1866 the spirit of railroad 
extension was spinning the shining network of its 
rails throughout the land; by 1869 it reached 
dimensions wonderful to behold, 8000 miles in each 
of the two succeeding years being the rate of in- 
crease. Profits satisfying the grasping hopes of 
avarice beckoned capital on, and, with small regard 
for consequences to themselves, the railroad man- 
agers plunged recklessly into competition. Existing 
lines were paralleled ; territories already covered by 
one system were invaded by rivals, and the great 
war of competition began in earnest. 

This weakness of unhmited competition, coupled 
with the extreme sensitiveness of the railroad to 
industrial and commercial changes, found it more 
than vulnerable when the crash of 1873 came upon 
the country. In view of the disastrous consequences 
of the failure of Jay Cooke & Company, in the 
troubles of that time, the railroad may fairly be said 
to have aided in bringing about its own decline, 
since it was in attempting to carry singly the enor- 
mous financial burden of the Northern Pacific con- 
struction that this great house went under. Within 
the next two years railroad increase dropped off 
seventy-five per cent. Then, responding to improved 
conditions, it started again on the wonderful career 
which ended early in the eighties, when enterprise, 
having overdone itself in such follies as the Nickel 
Plate and the West Shore bubbles, fell from sheer ex- 
haustion. Recovering therefrom within the short 
space of three years, a fresh start was taken, at a 
pace that placed the record for annual railroad 
extension at nearly 13,000 miles. This was between 
1886 and 1887, and was followed by a normal 
growth lasting until the financial troubles and indus- 
trial depression of 1893, when for the first time in 
the history of railroads in the United States the 
number of miles of road operated decreased. The 
discussion of this phase of the subject, bringing us 
as it does to the present time, will properly come 
later. Reverting, then, to the period immediately 

following 1869, extending, with the brief interrup- 
tion already noted, to 1883, we find an idea of the 
pace at which the great systems of the country were 
evolving in the figures for the single decade between 
1869 and 1879. 


Name of Road. 



Pennsylvania R. R 





N. Y. Central and H. R. R 

Chicago and Northwestern 

Chicago, Milwaukee, and St. Paul . . . 

This increase is not, of course, to be set down 
wholly to structural extension, which was in fact 
but one factor in the growth, and scarcely more 
important than several others. Consolidation, or 
acquirement by lease or purchase, has much to do 
with the formation of great lines. This policy was 
undoubtedly based in its conception upon the falla- 
cious idea, generally held by railroad managers at 
that time, that it was possible for a road, by exclu- 
sive control of territories, to obtain advantages in 
the dictation of rates and facilities that would enable 
it to maintain itself upon the arbitrary basis of 
charging "all that the traffic will bear." Under- 
taken in this spirit, however, the great systems, 
coming to understand more fully the limitations of 
their power, have applied themselves to the problem 
as it actually exists, and in the constantly decreasing 
rates of transportation, made possible by the econo- 
mies of concentration and latter-day improvements, 
they have given that stimulation to trade which is 
at once the encouragement of the merchant and the 
advantage of the carrier. To illustrate the growth 
that has resulted, the increased mileage of the fol- 
lowing large systems in the period from 1883 to 
1894 is given: 


Name of Road. 

Atchison, Topeka, and Santa F^ . . . . 

Baltimore and Ohio 

Central Pacific . . . . 

Chicago, Burlington, and Quincy . . . 
Chicago, Rock Island, and Pacific. . . 

Illinois Central 

Lake Shore and Michigan Southern. 
New York, Lake Erie, and Western 

Northern Pacific. 

Southern Pacific 

Union Pacific 





























Sketching thus in outline the history of the rail- 
roads down to recent times, one branch of the sub- 
ject has been omitted until the last in order that its 
importance might have the full consideration that it 
deserves. This is the transcontinental system. Its 
conception, its accomplishment, and its development 
are the glory of American genius, and its union of 
the most distant bounds of this great nation the 
bond which makes one in material fact a nation 
that must ever be one in sentiment and purpose. 
So early as April i, 1850, there met at Philadelphia 
a convention called to discuss the feasibility of a 
railroad to the Pacific coast. The discovery of the 
California gold-fields, and the rush thither in the 
years preceding, had turned men's minds as they 
had never been turned before toward that wonder- 
ful country so lately won from Mexico by the 
aggressive patriotism of Commodore Shubrick. 
From a little-known region where traders bartered 
for hides with the indolent and suspicious Mexicans, 
California had become the El Dorado where hun- 
dreds of thousands longed to go, and thousands 
already there clamored for the supplies the East 
would so willingly have furnished them. But there 
were no means of getting there except by the long 
sea- voyage, either crossing the Isthmus or around 
Cape Horn, or by the equally slow and far more 
perilous voyage in the prairie-schooner across the 
plains and mountains, where hostile Indians, starva- 
tion, thirst, — every danger, in short, that an unknown 
and arid land could offer, — awaited the traveler. 
Could a railroad but be built, these gentlemen who 
gathered at Philadelphia in 1850 felt how great 
would be its achievement and how instant its suc- 
cess. They were ahead of their time, however, and 
the project was too vast for immediate acceptance. 
Man had not then become accustomed to working 
miracles, as he has in these days, when no project 
is too immense or chimerical to have its stock sub- 
scribed for at some figure. Accordingly nothing 
was done beyond the mere exploiting of a great 
idea ; but perhaps that was the best thing that could 
have been done, inasmuch as it familiarized men's 
minds to the contemplation of the thing as possible. 
The second great step in the preliminary endeavors 
toward transcontinental railways was made during 
the administration of President Pierce, The War 
Department, at whose head was Jefferson Davis, 
organized and carried out a great survey, laying out 
several railroad routes across the continent. The 
report of these governmental engineers still further 
interested the country in the subject. 

The idea first enunciated in 1850 was twenty 

years in coming to its full fruition. The conditions 
caused by the war, and the necessity, more strongly 
felt than ever, for close communication with the 
great Western regions and the Pacific slope, were 
powerful motive forces in the direction of such an 
undertaking. Cahfornia had built her first railroad 
in 1856, and was as eager to reach the Atlantic as 
the Eastern States were to arrive at the Golden 
Gate. With a united sentiment in its favor, and a 
government ready to aid by every means in its 
power, the stupendous project was inaugurated on 
July I, 1862, by the incorporation by Congress of 
the Union Pacific, which in its junction, seven years 
later, with the Central Pacific near Ogden, Utah, 
completed the first railroad line across this or any 
continent. The government, as its share in the 
undertaking, granted subsidies of enormous value. 
To the Union Pacific — the main line of which ran 
from Omaha, a straggling frontier town, to Ogden, 
Utah, a distance of 1033 miles — was granted a sub- 
sidy in bonds of $16,000 per mile from the Missis- 
sippi River to the base of the Rockies. Across this 
almost impassable barrier the amount was raised to 
$48,000 per mile, and between there and the Sierras 
lowered again to $32,000 per mile. In all, 1038 
miles were subsidized, at an expense to the govern- 
ment in bonded indebtedness of $27,236,512. In 
addition to this the company was granted, subject 
to securing patent, no less than 12,000,000 acres of 

The Central Pacific, in its turn, with a subsidized 
mileage of 737, cost the government in bonds issued 
$25,885,120, and received land grants amounting to 
90,000,000 acres. The first rail on the Union 
Pacific was laid in July, 1865, and between then 
and May 15, 1869, when the junction with the 
Central Pacific was finally made, the work was car- 
ried on amid difficulties such as can scarcely be 
understood to-day. Surveying parties, cut off by 
Indians, perished miserably; construction camps 
harassed, stock driven off, stragglers cut down 
almost within hearing of the clicking picks and strik- 
ing shovels ; constant alarms and wearying watch- 
fulness — all these things made up the price which 
the white man paid the Indian for passage across 
his lands. Nor were these the only difficulties. 
Nature herself opposed her most formidable front 
to the invaders of her solitudes — deserts parched and 
alkaline, rivers rock-walled and turbulent, valleys to 
be crossed, hills to be cut down, mountains to be 
wound about in snake-like, tortuous cvirves. Now 
clinging to the side of a sheer precipice, now span- 
ning a fathomless chasm, now diving beneath some 

Stuyvesant Fish. 



huge spur barring the way across the everlasting 
heights, slowly the twin threads of steel crept on. 
Men who had shriveled with fever on the sun-baked 
levels shivered with the deadly cold on the cloud-girt 
heights, and hundreds fell. But the Rockies were 
crossed at last; to an altitude of 8205 feet above 
sea-level the long roadway cHmbed, falling thence 
slowly to the plateau beyond. It was the greatest 
engineering feat man had ever achieved, and marks 
an epoch in the progress which there began to 
stretch beyond the accepted bounds of human lim- 
itation. The Central Pacific crossed the Sierras in 
a similar manner at an altitude of 7042 feet, and 
dragged for hundreds of miles through the Hum- 
boldt Desert, and the work was done. There is no 
need to enlarge upon the importance of what is self- 
evident. The correlation of Occidental development 
and Eastern prosperity is too well understood to 
require demonstration, and even if it were not, the 
results which the brief quarter of a century of trans- 
continental communication has effected speak far 
beyond the power of either words or figures. 

Others of the early transcontinental lines speedily 
followed on the commencement just related. Long 
before the first through train from East to West was 
run, new companies had been chartered, and long 
construction trains, laying their roads before them as 
they went, were crawling across the continent. The 
Northern Pacific, chartered in 1864, was organized to 
construct a line from Lake Superior to Puget Sound, 
a distance of 1800 miles, with a branch 200 miles 
in length to Portland, Ore. The land grants ob- 
tained by this company aggregated 47,000,000 acres. 
The Atlantic and Pacific Railroad, chartered in 
1866, obtained grants of land based on mileage; 
12,800 acres being allowed per mile in the States, 
and 25,600 acres per mile in the Territories. This 
line in connection with the Atchison, Topeka, and 
Santa Fe, and the St. Louis and San Francisco 
Railway, made practically two routes across the 
continent. The Texas Pacific, which was incorpo- 
rated in 1 87 1 to extend from New Orleans to Sierra 
Blanca, a distance of 1068 miles, joined there the 
Southern Pacific, which ran to San Francisco, and 
the rail connection was opened on October 15, 
1882, thus perfecting the union of the Pacific coast 
with the country at large, and more fully binding it 
in the following year by the further junction of the 
Southern Pacific with the Galveston, Harrisburg, 
and San Antonio road to the Gulf. 

It would be impossible to trace further, even if 
space allowed, the progress in detail of that most 
complicated organism, the American railroad system, 

toward its present condition. By just what steps 
the advance, undeniably making toward homogene- 
ity and a concentration of control, is to be brought 
about is a question hard to answer, and admitting 
of explanation based on varying opinions. It is 
unquestionable that this potent force steadily work- 
ing is the one in which the final solution of the so- 
called " railroad problem " will be found. It is a 
power best observed in the results following its 
manifestations as railroad history knows them, and 
therefore best studied in the abstract rather than in 
the detailed enumeration of the absorption by the 
XX line of the YZ road, and so on through all the 
permutations of railroad evolution. 

The constructive period of the railroad in the 
United States may be said to have ended in 1869, 
assuming our definition of this period as that diuring 
which extension was purely on legitimate lines, with 
new fields for all, and non-competing roads the rule. 
This period, being naturally one of great prosperity 
for existing lines, became through this very reason 
the cause of their own undoing. It showed men 
where money was to be made, and regardless of the 
fact that where one man may live in plenty two 
men may find but scanty rations, and four men 
starve, they rushed into the new field. Thus was 
inaugurated, almost imperceptibly at first, but more 
and more impetuously as it went on, the era of un- 
checked competition, through which it seems to have 
been necessary that the railroads should pass. The 
very swiftness with which it came on -only aggra- 
vated the distemper. Industrial and commercial 
conditions found it impossible to keep up with the 
facilities that the railroads were offering. Manufac- 
tories were only producing such an amount as trade 
demanded, and trade, in its turn, was only of such 
volume as consumption, regulated by existing con- 
ditions, required. In the handling of this internal 
commerce, transportation facilities as they then 
existed sufficed. 

Into this seemingly well-balanced order was sud- 
denly injected the new element of vastly increased 
transportation capacities. Competitors built rival 
roads side by side with the old ones, and tapped 
from opposing sides the tributary territories. Then, 
that they might secure business, rates were lowered 
and the war fairly begun. Where one railroad had 
been able to handle the traffic of a given section, 
two now divided between them the same traffic. 
Commerce could not double itself at a bound ; it 
had to grow. Furthermore, it saw its advantage in 
this struggle of the railroads, and so in turn crowded 
each of the competitors to a fresh concession, which 



was at once used as the lever to screw down again 
the rival. This state of affairs could not last, and 
its effects were soon seen in the bankrupt roads that 
began to appear. These only brought a fresh com- 
plication to a condition of affairs that was fast be- 
coming alarming to the longer heads who were 
managing the great lines. Thus was demonstrated 
the fallacy that competition, free and untrammeled, 
could work no evil. With nothing in their treasuries 
and profit earning impossible, the only resource of 
the bankrupt roads was to secure business at any 
price in order to live, and they did it, and kept on, 
while the solvent lines became poorer. 

From such a state of affairs there was but one 
issue — natural, but distasteful to a degree to men 
who were jealous of their company's exclusive sov- 
ereignty, even to the extent of refusing joint traffic. 
This issue was combination, and the lukewarm 
manner of its early adoption made it but a poor 
remedy. Furthermore, the public, ever ready to 
view with alarm the harmony of great interests, saw 
in this only a gigantic scheme of the railroads to 
monopolize power. The very men and communi- 
ties who had thrived by the discriminations forced 
by a fierce competition were loudest in protesting 
when a more equitable adjustment was proposed. 
Towns fifty miles apart and connected by two or 
more roads could exchange their goods at a less rate 
of freight than was paid by the shipper in the small 
half-way town who had only one road to depend 
upon. By such a system as this the railroad man- 
agers sought compensation for the slaughter of rates, 
and the secretly favored shippers acquiesced silently. 
From those who paid full rates in the less favored 
towns, however, there was no such approbation. 
They were undoubtedly discriminated against, and 
instead of recognizing that it was the inevitable 
result of that competition so universally applauded, 
they regarded it as the deliberate persecution of 
great corj^orate interests. 

In the West this feeling was most intense, and the 
Granger movement, which began in Illinois in 1870, 
and attained the dimensions of a political power 
three years later, attests its violence. Of the legis- 
lation growing out of this agitation in the West there 
is little need to speak. The railroad commissions, 
as at first there organized, were too extreme in 
their partisanship to exert great remedial influence. 
Drastic laws enacted by the legislatures, scaling 
arbitrarily all rates to the basis of the competitive 
rate, nearly ruined the railroads. Taxes, wages, and 
fixed charges had to be met, and rates on that basis 
could not accomplish it. Capital became frightened 

and withdrew, and development in those sections 
was arrested to such an extent that even the legisla- 
tures themselves became alarmed, and where the 
Granger movement had flamed the fiercest it died 
the soonest, and within three or four years less 
arbitrary laws were passed, and the commissions 
became less bitter in their antagonism. 

Early commissions in the East were more fortu- 
nate, owing to the fact that the resident ownership of 
railway stocks and bonds made their spirit more 
temperate and their powers less arbitrary. Of this 
early appearance of the State regulation of railroads, 
afterward developed in 1 886 to national proportions, 
the scope of this article prevents extended mention, 
the subject falling more strictly within the lines of 
the chapter on " Interstate Commerce." 

Adhering, then, to the original lines of railroad 
discussion, we come in 1873 to that epoch-mark- 
ing event, the Saratoga Conference. Competition 
was verging on chaos. The solvent lines, having 
competed until combination had been forced as the 
alternative of ruin, now sought to present a united 
front to the bankrupt and reckless roads, whose 
motto was " business at any price." The five great 
trunk-lines connecting the Eastern seaboard with 
the interior were the Baltimore and Ohio, the Penn- 
sylvania, the Erie, and the New York Central, and 
north of all these the Grand Trunk, a Canadian line. 
Agents from the first four of these lines had from 
time to time met at regular intervals and published 
agreed rates. In the summer of 1873, however. 
Commodore Vanderbilt being at Saratoga, repre- 
sentatives from the Erie and the Pennsylvania met 
him there, and an arrangement was entered into by 
which, in addition to agreeing upon tariffs, the roads 
in question were to establish a board of arbitration 
to adjust disputes. President Garrett, of the Balti- 
more and Ohio, absent from the original conference, 
but consulted later, was the only dissentient Ameri- 
can. He refused to submit the independent action 
of his road to any board of arbitration. A rate war 
with his nearest neighbor in the combination, the 
Pennsylvania, was therefore begun, which resulted 
in the undoing of the work of the Saratoga Confer- 
ence, and all four of the American lines going back 
to the old arrangement of a mutually agreed-upon 
freight tariff and independent action. 

The Grand Trunk, cooperated with by numerous 
small Western roads, started one of the most 
momentous railroad wars ever known, and one that 
bade fair for a time to transfer to Boston the com- 
mercial supremacy previously enjoyed by New York. 
The terminals of this line, by virtue of its connec- 



tions, were Milwaukee and Boston, and between 
these points rates were fixed at a figure that was 
shortly diverting from Chicago and New York the 
great stream of traflSc, hitherto uninterrupted, be- 
tween these great centers. Neither Milwaukee nor 
Boston being competitive points for the other four 
great trunk-lines, these roads were disinclined to 
commence a ruinous rate war; but the divergence 
of New York's trade to Boston became at length so 
alarming, in the winter of 1875, that the New York 
Central was forced to take action, which it did with 
an initial and sweeping cut of sixty per cent. Fol- 
lowing the invariable rule in such cases, the warring 
parties soon reached the point when an agreement 
was necessary, and a sort of truce was patched up 
in December, which, after enduring a few weeks, 
ended in a general melee, in which the Erie, the 
New York Central, and the Grand Trunk were the 
most prominent, although after about eight months 
the entire five trunk-lines were ready for almost any 
sort of an agreement. 

The significance of this earliest rate war, by which 
Boston had benefited so greatly, was not lost upon 
Philadelphia and Baltimore, and all through the 
succeeding struggles the underlying motive was 
found in the desire of one of the three other great 
seaboard cities to surpass New York. With the 
exception of Boston, already sufl[iciently favored by 
the Grand Trunk, both Philadelphia and Baltimore 
had always been conceded a slight differential ad- 
vantage in rates to neutralize the difference in ocean 
freights their location imposed. New York found 
herself unable to concede the advantage longer when 
her rivals began their war for supremacy, and vari- 
ous more equitable substitutes were proposed and 
tried. Nothing availed, however, to avert one final 
struggle between all the lines ; and after rates had 
sunk to from 2.8 mills to 3.5 mills per ton per mile 
between the East and West, the roads at length 
wearied, and the joint or " pool " system was for the 
first time adopted on the great trunk-lines in 1877 ; 
Colonel Fink, who had originated and successfully 
carried out this idea two years before in the South- 
ern Railway and Steamship Association, being called 
upon to take charge. Under the terms of this first 
"pool" the Baltimore and Ohio received but nine 
per cent., the Pennsylvania twenty-five per cent., 
and the New York Central and the Erie thirty-three 
and a third per cent each. 

The important relation which these four great 
trunk-lines concerned in the East and West traffic 
bear to the railroad system causes them to serve 
most readily the purposes of illustration of the 

tendency toward closer relations displayed by the 
American railroads in their advance toward the 
homogeneous, even if not united, system of the 
future. Through wars almost numberless the out- 
come has been seen in every case to have been the 
assumption by the competitors of some mutual obli- 
gation for the sake of peace. The " pooling " idea 
thus traced to its first great manifestation has not 
been, however, of such recent growth as might be 
supposed. It was introduced into New England at 
an early date, and quietly used for a long time. 
The celebrated Chicago-Omaha pool of 1870 and 
the Southern organizations also preceded the Trunk- 
Line Association ; but all of these were largely ex- 
perimental, and certainly lacked the coherence aris- 
ing from the discipline of an actual central authority. 
When, after years of the bitterest war, however, the 
great trunk-lines finally came to adopt it, men real- 
ized that it had been inevitable. To-day, while rate 
wars and the tactics of competition are by no means 
ended, nor ever will be so long as many interests 
compete for similar ends, their effects are no longer 
so ruinous as twenty years ago. With the great 
corporate interests vested in the railroads joining 
with one another for mutual protection and advan- 
tage, that thing most vividly pictured by the dema- 
gogues has never come to pass. Instead of a great 
monopoly crushing the public rights underfoot is 
found a condition of things so vastly improved since 
1873 that it seems scarcely possible that railroad 
science can have advanced so greatly in so short a 
space of time. Rates have fallen to a point abso- 
lutely impossible before the era of improvement, and 
both freight and passengers are now transported for 
less money, and with more safety, speed, and con- 
venience, than in any other country on the face of 
the earth. Freight rates, which in 1873 averaged 
1.985 cents per ton mile on the great trunk-lines, 
fell in the twenty years ending in June, 1893, to .8 
of a cent per ton mile, a reduction of nearly sixty 
per cent. In the West and in the South the reduc- 
tion has been much greater. In order to better 
understand the tremendous significance of this 
decrease a further reference to the figures will be 
useful. The shippers of the country paid in round 
figures the sum of $808,000,000 for the transpor- 
tation of their freight in 1893. Had the rates of 
twenty years ago still prevailed, the sum of $2,020,- 
000,000 would have been required to meet these 
charges. Thus the people and the commercial in- 
terests of the United States were saved an annual 
amount of $1,212,000,000. 

Such a tremendous falling off in rates has, of 



course, only been withstood by the raiboads by the 
exercise of the most rigid economies, the adoption 
of every improvement tending to minimize the cost 
of operation, and an adaptation to latter-day needs, 
which, on the closest of profit margins, demand a 
volume of business of gigantic proportions in order 
to balance the long account of the fixed charges. 
Nor has this wonderful change in railroad conditions 
come about without injury to the corporations en- 
gaged. No less than forty per cent, of the mileage, 
representing about thirty-one per cent, of the prop- 
erty valuation of the railroads, has been forced into 
bankruptcy during this period. The lines that have 
survived the strain have done so only by the ex- 
penditure of millions in the improvement of their 

One of the greatest, as it is perhaps the most 
important, of all these changes has been the intro- 
duction of steel rails in the place of the old iron 
ones. In the twenty years following the adoption 
of these rails on the New York Central the volume 
of traffic increased from 400,000,000 ton miles to 
2,000,000,000 ton miles. With the old iron rails 
such an enormous traffic would have been practically 
impossible, and its cost absolutely prohibitive. Be- 
ginning with a rail but little heavier than the iron 
ones then in use, the weight has been gradually 
increased as its economy was appreciated. To-day 
the I oo-pound rail is in not uncommon use on lines 
of heavy traffic, especially on curves and grades, 
and it has been found one of the most potent factors 
in reducing cost both in draft-power required and in 
diminishing wear and tear on rolling-stock. The 
increased use of steel in place of iron for rails, 
resulting in the practical displacement of the latter 
by the former, is best shown in the figures giving the 
annual production of railroad bars during the period 
covered by the change. 


Retained for 










1873. . . 





1880! '. 









1885. . . 





1890. . . 





1892. . . 





The tons in this table are figured at long weight, 
2240 pounds. 

A still clearer idea of the increase in the use of 
steel rails, expressed in mileage, may be had from 

the fact that where in 1880 there were 81,967 miles 
of iron to 33,680 miles of steel rails, there were in 
1892 only 38,641 miles of iron as against 182,858 
miles of steel rails, an increased percentage of steel 
from 29.1 to 82.6 of the total mileage. 

The direct result of the introduction of steel rails 
was an increased weight of rolling-stock, and an in- 
crease in more than an arithmetical proportion of 
the carrying capacity per car. The freight-car of 
a capacity of 30,000 pounds, used a few years ago, 
is obsolete and wasteful, while those of 60,000 
pounds and of even greater capacity are now in 
general use, and may be classed as standard. As 
cars increased in weight so did the locomotives. 
With the heavy steel rail came of necessity the 
weightier and more compact road-bed, and stone- 
ballasted ways succeeded the old dirt embankment. 
Over this, immense weights can roll freely, and the 
locomotive has become a mammoth. In place of 
the little one-ton Tom Thumb of Cooper, or the 
heavy seven-ton engines of the Stephensons, are 
found to-day the sixty and seventy ton passenger- 
fliers and the eighty and ninety ton freight-engines. 
One giant of the modem rail is a ten-driver freight- 
locomotive of the Lake Erie and Western, which 
weighs, as it couples to its train, 115 tons, and could 
draw the combined rolling-stock of every road exist- 
ing in the United States in 1835. 

Important as track and road-bed are to this de- 
velopment, they are but a part ; and as the strength 
of a chain is that of its weakest link, so would the 
modern railway fail were it not for the improved 
bridge construction which has also come during the 
past quarter of a century. All bridges in the earlier 
days of the railroad were of wood, and the long 
trestleworks with which the old engineers crossed 
uncomfortable swamps are still well remembered. 
Apart, however, from the question of its structural 
strength, the wooden span was dangerous from other 
reasons : it would decay in the weather ; it would 
bum if a hot coal dropped ; and it would warp and 
shrink if the material used in its construction was 
unseasoned. Even an improved truss, obviating to 
a certain extent the latter fault, was insufficient to 
make the wooden bridge either a safe or a profitable 
feature of railway construction, and by 1870 it had 
begun to retreat before the iron bridge. This latter 
material has now so nearly superseded wood in the 
bridges of the country that it is scarcely necessary 
to discuss it. The many designs of truss and span 
give wide variety in its appHcation, from great sus- 
pension-bridges to lofty viaducts. One of the latest, 
and perhaps the greatest achievement of the bridge 



builder's art, is the so-called cantilever, which may 
fairly be claimed as an American invention, since 
the first suggestion of it came from Thomas Pope, 
who proposed in 1810 a cantilever bridge across the 
East River. The first cantilever bridge built for 
railroad traffic was across the Kentucky River, 
C. Shaler Smith being the engineer. Since then there 
have been some wonderful examples of this style of 

The bridges and road-beds, improved as outlined 
above, have constituted lines over which the enor- 
mous traffic of to-day passes easily and cheaply. 
Single locomotives now draw trains weighing 2500 
tons. Huge palace-cars, weighing as much as a 
whole train did in the earlier days, are now whirled 
along at a rate that fifty years ago would have been 
considered beyond mortal attainment. Still engi- 
neers and railway officials are not satisfied, and there 
is a never-ceasing endeavor on all sides to advance 
still further. The introduction of electricity as a 
motive power, already heralded by the Baltimore 
and Ohio in their Baltimore subway, and by the 
line at Nantasket, Mass., is the first step in what 
many able engineers believe will be an advance to 
speed in comparison with which that of to-day will 
seem as little as already does the " frightful velo- 
city " of forty years ago, when a traveler held his 
breath if the speed was greater than thirty miles an 

A very natural query raised by the discussion of 
speed on the modern railway is how it has been 
accomplished concurrently with perfect safety. That 
traveling is nearly as safe as remaining at home is 
generally conceded, and in the United States espe- 
cially fewer deaths are placed against the railroads 
in proportion to the miles traveled than in any other 
nation. Even with this favorable showing the laws 
are so rigid in holding railroad corporations to the 
strictest liability that nearly $2,000,000 annually are 
awarded in death-claims and damages against them. 
Spurred on by the strictness with which they were 
held to account, and, little as it may be believed, 
actuated also by humane motives, the railroads have 
adopted every new and improved appliance tending 
to increased safety. 

Since the first use of the telegraph on the line of 
the Baltimore and Ohio, everything tending to place 
hundreds of miles of road under central and system- 
atized observation and control has been adopted as it 
appeared. The train despatcher, with his numerous 
assistants, in the great union station, now directs 
the movements of every train. Not a driving- 
wheel turns but by his orders, nor a moment of lost 

time is noted that is not at once explained to him. 
The great switch-towers, where scores of levers 
concentrate the directing force of acres of steel 
network, are the development of the interlocking- 
switch system. Air-brakes, torpedoes, flags, lights, 
semaphores, electric enunciators, derailment guards 
and split-rail switches, safety-bolts, and, last and 
greatest of all, the block system, guarding both ends 
of the flying express at once, are some of the meth- 
ods and devices by which safety has been secured. 
Of these, next to the block system, the air-brake, 
which was first applied to passenger-trains in 1868, 
is perhaps one of the most notable advances. 

The evolution of the rolling-stock of the railroads, 
particularly as it is connected with the passenger 
service, began almost with the introduction of train 
service. The English compartment coach was 
quickly superseded by the so-called American car, 
with its central aisle, side-seats, and undivided space. 
The first sleeping-car, which was simply an ordinary 
passenger-car fitted with rude wooden berths, was 
run on the Cumberland Valley Railroad of Pennsyl- 
vania from Harrisbxu"g to Chambersburg in 1836. 
Sleeping-cars continued of the same crude sort until 
1864, when George M. Pullman built the first of his 
modern coaches in the shops of the Chicago and 
Alton road. This car, named the Pioneer, was both 
too heavy and too wide for the roadways of that 
day ; but a special car being required to convey the 
body of President Lincoln after his assassination, 
the Pioneer was taken, and the Chicago and Alton 
altered its road to suit its dimensions. Later, when 
President Grant traveled through the West, this car 
was taken, and several of the other roads made the 
changes necessary to its passage over their lines. 

Thus the Pullman car was introduced, and the 
Pullman Car Company was organized in 1867. 
The Wagner palace-car was also early in the field, 
especially on the Vanderbilt lines. The first hotel 
or buffet car was built in 1867, and the Delmonico, 
the first Pullman dinner-car, was run on the Chicago 
and Alton road in the year following. The vesti- 
bule, making a safe passageway between the cars 
of a moving train, was first suggested by a sort of 
canvas diaphragm used to connect cars on the 
Naugatuck Railroad in Connecticut in 1857, but it 
was not until 1887 that the first vestibuled Pullman 
train was operated. To-day a vestibuled limited 
express has several luxurious sleeping or chair cars, 
a dining-car, smoking-saloon, library and writing- 
room, with stenographers and type-writers in atten- 
dance, bath-room, and barber-shop. The old-time 
method of tickets issued by each hne separately, 


involving change of cars and several payments of now loaded in a car at New York and not unloaded 

fare, is now done away with by the system of until it reaches San Francisco. Each line over 

coupon tickets, in regulation of which the passenger- which the car travels on its journey charges its own 

agents department of the different railroads has rates and receives its due proportion of the total 

assumed a complexity of detail second only to that charges. The road owning the car in which the 

in the freight department. goods are shipped receives in addition from three 

The government's use of the railroad for the con- eighths to three fourths of a cent per mile from the 
veyance of the mails is too generally understood to other roads, for whatever distance the car may 
require more than a brief mention. Congress, on travel on their lines. The theory is that the Eastern 
July 7, 1838, constituted every railroad in the car, when it reaches San Francisco and is unloaded, 
United States a post-route. For this service a stip- is to be returned to its home line as soon as pos- 
ulated amount per pound has always been paid the sible. Unfortunately in practice this results but un- 
railroads as common carriers of freight mail-matter, satisfactorily, despite the thorough organization of 
A special compartment in the baggage-car served the modem car-accountant's department. Delays 
for many years for the mail; but in 1864 Colonel in unloading, reloading for a point on the home- 
Armstrong introduced the railway mail-car, as had ward journey, reloading consigned to order, and 
been suggested two years before by W. A. Davis, a hundreds of other causes contribute to make more 
clerk in the St. Joseph post-office. The first fast than problematical the date of return of a car that 
mail-trains were run in 1874 by the New York has once got out of home territory. Plans to remedy 
Central, and a little later by the Pennsylvania, the detention and "to order" abuses have been 
The receipts from the mail service, together with proposed and tried in great number, the per diem 
those from the express companies, etc., make up plan of demurrage or car rental, advocated by Mr. 
about five per cent, of the revenues of the railroads, Fink, and introduced for a short time on the trunk- 
and the passenger service contributes about twenty- line roads in 1 888, being about as successful as any. 
five per cent. ; while the transportation of freight. The so-called fast freight lines are an important 
which is the bulk of the business, adds seventy per feature of this branch of railroad transportation, 
cent, to the incomes of the railroad corporations. They are of two kinds. The first is simply the 

The rolling-stock necessary to the transaction of development carried a little further of the system 

this business, as apportioned among the different already described — the application of the coopera- 

branches, is as follows : tive principle among a number of roads. The sec- 

^ ond is the operation of cars by a private corporation 

Passenger-cars 27,909 ,... , , ., , 

Baggage, mail, and express cars 7,937 derivmg its revenue from the same mileage charge 

TT with which the railroads compensate one another for 

Freight-cars i,i9i',884 the use of their rolling-stock. 

Total cars 1,227,730 Through all these various channels the great vol- 
ume of the country's traffic flows steadily back and 

como IV s 3 , 93 forth. If our system is not the best in point of 

The freight service being, therefore, the most im- routine detail and administration, it is still easily first 
portant function, financially and commercially, of the in that far more important consideration of cost, 
railroads, it has attained an economic importance Nowhere in the world is freight hauled so cheaply 
of the first magnitude. In this phase it has already as it is in the United States. The average cost of 
been considered, but in its practical working there transportation per ton mile is, as has already been 
has been developed a system of such far-reaching stated, .8 cent. In Europe it is two and one half 
scope and immense potentiality that it deserves de- times as much, or two cents per ton mile. The 
scription. The days when no road allowed its difference amounts in the annual aggregate to mil- 
freight-cars to leave its own tracks have long since lions of dollars, the greater part of which represents 
passed. The expense and delay incident to the an actual saving to the people of the country on the 
frequent transhipment of through freight became standard articles of consumption and necessaries of 
insupportable, and the commercial world rebelled, life. The actual value in dollars and cents which 
The adoption of a standard gauge and the accep- this saving represents can easily be figured from the 
tance of the principles of joint traffic began directly totals given by "Poor's Manual" for 1895: the 
after the Civil War, and have extended until they number of tons of freight moved was 675,129,747, 
have reached the present conditions. Freight is and the average length of haul 121.89 miles, giving 



82,289,400,498 ton miles. Estimating the average 
difference between American and European rates at 
1.2 cents, the difference in total charges, accruing 
as a clear saving to the public, is $987,472,805.97. 

The strikes and labor troubles from which the 
railroads have ever suffered are scarcely to be dis- 
cussed within the limits of this article. The first 
great strike appears to have been that on the Balti- 
more and Ohio in 1857, and the last was the 
uncalled-for and disastrous Chicago riot of 1894. 
It is scarcely possible to measure in money the 
damage done, since, apart from the losses sustained 
by either party to the dispute, is the loss to the 
business interests of the country through impeded 
transportation and obstruction of the mails. Any 
one branch of business that employs, as the railroads 
do, 2,000,000 people is, of course, liable to labor 
troubles; but in view of the relations held by the 
railroads to the general interests of the country, it 
is scarcely reasonable that the conveniences and 
necessities of nearly 70,000,000 should be disre- 
garded, even if the interests of the other 2,000,000 
were being thereby advanced, which is by no means 
so certain as labor leaders would make others think. 

The growth of the railroads of this country, coin- 
cident as it has been with Western development, 
has witnessed a steady march of the mileage center 
in the direction popularly supposed to be taken by 
the star of empire. This advance, together with the 
relative growth of railroad mileage of the different 
groups of States, is shown by the following tables : 


1840 25 miles west of Mauch Chunk, Pa. 

1850 25 miles northwest of Williamsport, Pa. 

i860 60 miles south of Mansfield, O. 

1870 Paulding, O. 

1880 30 miles northwest of Logansport, Ind. 

1888 90 miles south-southwest of Chicago, 111. 







New England. . . . 






Middle States 






Southern States . . 






Western States and 

Territories .... 






Pacific States and 

Territories .... 





The last subject to be taken up in the discussion 
of the American railroad falls more properly within 
the domain of the financier. When it is remembered 
that $5,075,629,070 capital stock and $5,665,734,- 
249 of bonded indebtedness are represented by rail- 
roads in this country, the importance of the financial 
interests involved becomes readily apparent. Financ- 

ing has come to be as essential a department of railway 
management as any other, and is, generally speaking, 
more complicated and less capable of explanation. 
Historically considered, railroad securities, which 
have been for years the most prominent feature of the 
money market, have had numerous ups and downs. 

In the very earliest days, when all roads made 
money freely, and the field had not yet become 
overcrowded, investors subscribed for railroad stock 
almost as fast as it could be issued. The crisis of 
1857, with its demonstration of the liabilities of 
stock under the bondholders' mortgage, caused a 
sudden and violent reversion of public sentiment in 
favor of the latter class of securities. Here again 
the pendulum swung too far in the opposite direc- 
tion. It was a simple matter for unscrupulous men 
to organize a company and pay in a small fraction 
of the stock and float their bonds. The bonds once 
floated, some favored construction company would 
be given the contract to build the road at a price 
from ten to forty per cent, in advance of its real 
cost. Then the first reverse threw the road into 
bankruptcy, and under their mortgage the bond- 
holders would take possession, thus securing a road 
worth far less than the face value of its bonds, and, 
as shown, from ten to forty per cent, less than the 
investment made at the price for which these bonds 
had been floated. 

The crisis of 1873 brought the abuses under the 
bond system home to many, but the bitter days 
during 1885 were necessary to fully impress the 
lesson upon the public mind. Since then a better 
understanding of conditions has prevailed, and under 
responsible managements the securities of the rail- 
roads have come to represent intrinsic values, reliable 
and stable, except so far as all great interests are 
subject to prevailing national conditions. 

The present condition of the railroads of the 
United States is thus summarized in a statement of 
their revenues and expenditures in " Poor's Manual " 
for 1895 : 


Capital stock $5,075,629,070 

Funded debt 5,665,734,249 

Unfunded debt 383,567,232 

Current debt 440,669,656 

Total liabilities $1 1,565,600,207 

Cost railroad and equipment $9,789,543,001 

Real estate, stocks, bonds, and other invest's. 1,167,879,162 

Other assets 240,526,350 

Current accounts 226,502,371 

Total assets $1 1,924,450,884 

Excess assets over liabilities $358,850,677 


Statement of Railroad Condition and Revenues. — Pacific coast roads were the heaviest sufferers. Con- 

Conttnued. sumption had almost ceased in the articles which 

Passenger-traffic earnings $276,031,571 were superfluous, or purely for ornament, and the 

Freight-traffic earnings 700,477,409 , j r ^t. ^- ^ j r 

Other traffic earnings 9i»i34»533 demand for other articles ceased as far as was pos- 

Elevated roads (New York) 12,661,502 gible. Under these circumstances manufacturers had 

All other receipts, including rentals received by , . , , , . , , j j , , ■. 

lessor companies 96,477,443 httle to deliver, and merchants and dealers found 

~I 'T~ ~ it impossible to pay for more than a moiety of what 
they had required in previous years. In the face of 

Othe'r lnt°ere^t"^' '^^^754,971 ^his tremendous decline in receipts the railroads set 

Operating expenses 757. 76^,739 themselves to a retrenchment of expenses that re- 

RenSs.^tolls, etc! \ '. '.'.'.'.'.'.'.'.'.'.'.'. '. '. '.'.'.'. '. '. '. '. '. (^'S>o'^4 suited in reducing the net loss in earnings to a point 

Miscellaneous 38,220492 where, in some few notable cases, the net income 

Payments $1,187,250,692 increased. How vast these economies were is best 

^ , ^ , , , . „ shown in the following table, including a selected 

Excess of fixed charges and miscellaneous pay- , , , , , , 

ments revenue $10,468,234 number of the larger and better-known roads : 



Decrease in Gross 

Decrease in Net 


Pennsylvania (three roads) 

Atchison, Topeka, and Santa F^ (four roads) 

Chicago, Burlington, and Quincy 

Philadelphia and Reading C. and I 

Delaware, Lackawanna, and Western (three roads) 

Chicago, Milwaukee, and St. Paul 

New York Central and Hudson River 

New York, Lake Erie, and Western 

Chicago and Northwestern 

Union Pacific (eight roads) 

Illinois Central 

Southern Pacific (six roads) 

Baltimore and Ohio (two roads) 

Michigan Central and Canada Southern 

Northern Pacific 

Delaware and Hudson (four roads) 

Chicago and Alton 

Manhattan Elevated 














1 ,479,075 

The financial and commercial troubles of 1893 
developed in the railroads a new phase of adminis- 
trative excellence that is the highest tribute that can 
be paid, in closing this article, to the men who are 
in practical charge of the great railroads of the 
country. By the report of the Interstate Commerce 
Commission, the year ending June 30, 1894, wit- 
nessed a shrinkage of $840 per mile in the gross 
revenues of 570 roads, representing a total mileage 
of 149,559. Dividends on these roads fell off 
$3,999,169, and there was a total deficit in their 
accounts of $28,255,121. The Southeastern and 

To treat the vast subject of the history of Ameri- 
can railroads exhaustively in an article the limits of 
which are circumscribed by the exigencies of space 
would be manifestly impossible. If I have succeeded 
in conveying a picture to the mind, although set in 
a small frame ; if I have succeeded in demonstrating 
the importance of our railroad system as a matter in 
which every patriotic and intelligent citizen is deeply 
concerned ; and if I have, by telling what has been 
done, foreshadowed the unlimited possibilities of the 
future, I shall feel satisfied with my effort to cover the 
ground of American railway history, however briefly. 




THE memory of men still living is sufficiently 
elastic to stretch back to the beginnings of 
steam-railroads in this country, and to com- 
prehend the various changes by which the modem 
railway has become a highly organized and elabo- 
rately equipped mechanism. We borrowed the rail- 
way from England, but developed it on our own 
lines. The invention of the locomotive at first 
simply furnished a mechanical power to transport 
freight in cars that had formerly been hauled by 
horses. Tramways were in use in the Hungarian 
mines during the sixteenth century; and Ralph 
Allen's English stone-car of 1734, with its flanged 
wheels and its hand-brake, is clearly the forerunner 
of the freight-cars of to-day. 

The term "railway" was invented in 1775, when 
it was first used in Smeaton's reports on English 
transportation, a quarter of a century before steam 
was applied to locomotion. Thanks to the recent 
researches of Mr. Clement E. Stretton, we now 
know that the first persons ever conveyed by a 
locomotive on rails traveled, on February 24, 1804, 
behind Trevethick's locomotive on the Pennydarran 
cast-iron plateway or tramroad to Merthyr-Tydvil, 
in Wales, a distance of nine miles. In order to 
transport long bars of iron and timber, the cars were 
made in pairs, coupled together by an iron draw-bar 
having a joint at either end. The cars had no 
sides, but in the middle of each was fixed a center- 
pin upon which worked a cross-beam or bolster, and 
upon this cross-beam the timber or bars of iron were 
placed. On the occasion adverted to the trucks 
were loaded with ten tons of iron bars, and seventy 
persons stood on the iron. Here we have the origin 
of the bogie or truck, the invention of which has 
been claimed for this country, as we shall see here- 
after. Also the capacity of the freight-car, fixed at 
the beginning at ten tons, remained at that figure 
for half a century or more. 

In 181 2, John Blenkinsop, of Leeds, had a pri- 

vate car built to carry himself and his managers to 
his Middleton colliery, while the workmen rode on 
the coal-cars. On July 27, 1814, George Stephen- 
son's first locomotive, Blucher, drew over the Kenil- 
worth colliery line a passenger-car made by placing 
the body of Lord Ravensworth's four-in-hand coach 
on a wooden frame fitted with flanged wheels. 
This car was used for twenty years. On Septem- 
ber 27, 1825, the Stockton and Darlington Railway 
was opened, and trains of coal-cars were run, with 
one passenger-coach, named the Experiment. This 
was the first passenger-car to be run regularly for 
the use of the public. It was placed on four 
wheels, and had a door at each end, with a row of 
seats along either side and a long deal table in the 
center. This car was operated ten days, until the 
novelty was worn off; and then the faster stage- 
coaches carried the passengers. It was not until 
September 15, 1830, that the Liverpool and Man- 
chester Railway opened its line with a train carrying 
600 passengers, and immediately thereafter began to 
run the first regular passenger-trains. 

It is a striking fact in the history of car construc- 
tion that the English invented both the truck and 
the long passenger-car with the door at each end ; 
and that these forms, once invented, were almost 
immediately discarded in England, so that it was 
left for this country to reinvent them and to make 
them the distinguishing features of American car 
building as contrasted with English construction. 
Indeed, it has been with great reluctance that we 
have ceased to claim them as original discoveries. 

The fact that passenger-trains, by displacing 
stages, threw out of use many of those vehicles, 
coupled with the other fact that the stage owners, 
submitting to the inevitable, often became railroad 
promoters, furnishes a reason why the early masters 
of transportation both used the stage-coach body as 
a matter of economy, and also built their new cars 
on the model in which the conveniences of travel 




had been most highly developed. The first passen- 
ger-coach used in Pennsylvania in 1832 was a stage- 
coach slightly enlarged. To be sure, the early prints 
show that in 1830 Peter Cooper's first locomotive 
hauled an open boat-shaped car from Baltimore to 
Ellicott's Mills, on the Baltimore and Ohio Rail- 
road ; but this model must have been adopted for 
economy's sake, because in 1833 that railroad placed 
in service the Ohio, a stage-coach in shape, with seats 
on top as well as inside. 

As President Mendes Cohen well observed in his 
address before the American Society of Civil Engi- 
neers in 1892, the first important modifications in 
car building were called forth by the speed devel- 
oped in the locomotive. Naturally the wheels first 
demanded attention. The names of four men 
are connected with early wheel improvement. Mr. 
Knight improved the shape of the tread and flange ; 
John Edgar and Ross Winans developed the chilled 
features ; and Phineas Davis further improved and 
perfected the wheel by altering the disposition of 
the metal in the tread and the angle of the flange, 
and by introducing within the cast-iron wheel a 
wTOUght-iron ring of five eighths or three quarters 
of an inch round iron, which both perfected the chill 
and also added strength to the wheel. Mr. Winans's 
shops turned out thousands of these wheels for use 
not only in this country, but also in Germany and 
Switzerland. From 30,000 to 50,000 miles repre- 
sented the capabilities of a Winans wheel. 

With increased speed came the need for increased 
steadiness, and it occurred to Ross Winans that by 
adopting the device of the bogie, or swiveling truck 
used in the transportation of freight, he could build 
an easy-riding passenger-car. In 1833 Mr. Winans 
constructed three long houses on wheels, each capa- 
ble of seating sixty passengers. Having patented 
his invention, he was confronted by the fact that the 
principle he had used was one that had been utilized 
frequently on tramways, and particularly on the 
famous Quincy granite railroad, built to transport 
stone for the Bunker Hill Monument. At the end 
of protracted litigation the courts annulled the 

We now know that prior to 1830 England had 
three bogie-engines at work ; that in 1 83 1 Stephen- 
son's John Bull, built for the Camden and Amboy 
road, was made into a bogie after it reached this 
country — a fact made patent by the famous run of 
that engine from New York to Chicago in 1893; 
that Horatio Allen used a bogie-engine on the South 
Carolina Railroad in 1832, the same year in which 
the bogie-locomotive Experiment was built for the 

Mohawk and Hudson Railroad. Moreover, the 
bogie principle was patented in England in 181 2. 
Yet, whatever may be the legal aspects of the case, 
it is certain that the American passenger-car of to- 
day originated with the three passenger-coaches 
built in Ross Winans's shops in 1833. England 
discarded the bogie principle for engines in 1830, 
and did not return to it until 1876 ; and that coun- 
try to this day has not adopted the bogie for passen- 
ger or freight cars. In 1889, the Paris, Lyons and 
Mediterranean Railway adopted the bogie for cer- 
tain passenger-cars; and this year (1895) the Great 
Western Railway of England has begun to experi- 
ment with the bogie-truck. In America the Winans 
passenger-coach almost immediately supplanted 
everywhere the stage-coach form, which England 
still retains in a modified shape, excepting only on 
the Pullman cars, introduced into that country in 
1874. With us not only the passenger-cars, but the 
baggage, mail, and freight cars, all were placed on 
swiveling trucks. 

That the early railroads of this country were 
designed to carry passengers rather than freight is 
to be seen by their reports. The Baltimore and 
Ohio road, from January i, 1831, to October ist, 
carried over its thirteen miles of track 5931 tons of 
freight and 81,905 passengers; and so late as 1839 
the Camden and Amboy carried only 13,520 tons 
of merchandise as against 181,479 passengers. In 
fact, the railways as freight carriers could not com- 
pete with the canals, which in those days were the 
traffic routes. In 1831 the Tuscarora and Port 
Carbon Railroad could not meet canal rates by 
thirty-nine and one quarter cents per ton, the railway 
charges being forty cents, plus a toll of fifteen cents 
per ton, while the canal rates were ten and three 
quarter cents, plus five cents toll. 

Mr. John Kirby, describing from memory the 
freight-car of 1848, says that it was the same square 
box it is to-day ; its capacity was from six to ten 
tons ; the roof was covered with cotton duck painted 
and sanded. The hot sun cracked this covering and 
let the water in on the freight, an annoyance com- 
mon also to passenger-coaches of that day. Few 
freight-cars were used in New York State at that 
date, the Erie Canal being sufficient for summer 
freight. Wood was the universal fuel, so there was 
no coal transportation. Wooden brake-heads were 
used, and it required three men to turn the screw 
that pressed the wheels on and off the axles. The 
ripping of planks was done by hand, as was also the 
dressing up ; and when one man had tools to grind, 
a fellow-workman turned the stone. Carpenters 



and car builders of six years' experience commanded 
$i.i2j4 a day wages. 

Viewed from the standpoint of to-day, the passen- 
ger-car of the early fifties, built at a cost of about 
$2000, was a combination of inconveniences. The 
cast-iron stove in the center of the car broiled those 
who sat immediately around it, while the unfortu- 
nates one seat removed from its satanic glare shivered 
and froze. In summer the dust was intolerable, and, 
notwithstanding elaborate devices for ventilation, 
the dust problem did not begin to be solved before 
the appearance of the monitor roof in i860. Hot- 
water heating and the abolition of the deadly car- 
stove came with the Pullmans. 

In 1856, Captain (now Sir) Douglas Galton,of the 
Royal Engineers, was sent to America to investigate 
our railways. His report to the Lords of the Privy 
Council for Trade gives a straightforward and un- 
biased account of his investigations. Perhaps there 
is extant no other report which so comprehensively 
discusses the railway situation in the United States 
about that date. 

" The practice of constructing railways [in Amer- 
ica] in a hasty and imperfect manner," says Captain 
Galton, " has led to the adoption of a form of roll- 
ing stock capable of adapting itself to the inequalities 
of the road ; it is also constructed on the principle 
of diminishing the useless weight carried in a train. 
The principle is that the body of the car is carried 
on two four-wheeled trucks, to which the body is 
attached by means of a pintle in the center, the 
weight resting on small rollers at each side. The 
framing of the truck is supported on springs resting 
on the axles, and the pintle and rollers are fixed to 
a cross-beam, which is attached by springs to the 
main framing ; so that between the body of the car 
and the axles are a double set of springs. India- 
rubber springs are in general use, but they often 
become hard ; consequently sometimes steel springs 
are used, with great advantage. Any side move- 
ment which might result from the slight play allowed 
to the cross-beam is counteracted by springs placed 
between its ends and the framing. An iron hoop 
attached to the framing passes under the axle on 
each side, so as to support the axle in case it should 

The bearings Captain Galton found not unlike 
those used in England, but the use of oil as a lubri- 
cator was novel. He was told that under favorable 
circumstances the oil in an axle-box needed to be 
renewed but once a month ; but that it was difficult 
to obtain good oil. The wheels were of cast-iron, 
with chilled tires ; they were from thirty to thirty-six 

inches in diameter, weighed rather more than 500 
pounds, and were without spokes. When made by 
the best makers they would run from 60,000 to 
80,000 miles before the tires were worn, and they 
cost from ^3 to ^3 los. each. The iron used in 
making wheels was of very superior quality ; and so 
great was the practical skill required that but three 
firms in the United States could be relied on to 
furnish wheels of the first grade. 

The most approved form of draw-bar was contin- 
uous under the car, and was attached to the eUiptic 
springs, acting in both directions. The iron shackle 
was in general use, but some railways preferred an 
oak shackle eighteen inches long, two inches thick, 
and six inches broad. This block was bound with 
an iron band divided on each side at the center, so 
that a car on leaving the rails would break the 
shackle transversely. 

Already the automatic coupler for freight-cars 
was prefigured in a device by which the pin in the 
bumper of one of the cars was supported by means 
of a ball, so that the shackle of the on-coming car 
pushed back this ball and let the pin fall into its 
place. All passenger-cars and most freight-cars 
were supplied with brakes; and the Philadelphia 
and Reading Railroad was endeavoring to anticipate 
the day of train-brakes by an invention whereby 
a sudden check in the speed of the engine applied 
the brakes to the wheels of all the cars. The 
saloon, the car-stove, and the ice-water tank all had 
established themselves in the best cars, and were 
novelties to the visiting Englishman. 

On the Illinois Central, between Cairo and 
Dubuque, some of the cars were filled with com- 
partments in which the backs of seats turned up and 
so formed two tiers of berths or sofas, for the 
accommodation of persons who might wish to lie 
down and were willing to pay for the privilege. 
The passenger-car had attained a length of sixty 
feet, though the thirty and forty-five foot cars were 
more common ; the baggage-cars, with their com- 
partments for mail and express, were thirty feet long, 
and the freight-cars from twenty-eight to thirty feet. 
In those days the freight-cars were constructed more 
strongly than were the passenger-coaches ; a Balti- 
more and Ohio freight-car twenty-eight feet long, 
and with a capacity of nine tons, itself weighed six 

In summing up the result of his observations as 
to the rolling stock in this country, Captain Galton 
notes that the Americans appear to have taken their 
ideas more from a ship than from an ordinary car- 
riage, and to have adopted the form best calculated 



to accommodate large masses, with a minimum of 
outlay for first cost ; and that while the cars had 
been designed with a view to avoid every appear- 
ance of privilege or exclusiveness, or of superiority 
of one traveler over another, they had been con- 
structed so as to secure to every traveler substantial 
comfort and even privacy. 

" There is but one class," he said ; " but as the 
cars are designed with more regard to comfort than 
English railway carriages, this class is much superior 
to our second and third classes, and is inferior only 
to the best first-class English carriages. Notwith- 
standing the superior comfort of the American rail- 
ways, the rates of fare averaged lower than the 
second and sometimes even the third-class fares in 

Of necessity progress in car building had to wait 
for the development of the railroads. The original 
roads were not constructed as through lines between 
the larger cities, but as the connecting-links between 
natural waterways, answering to the portages or 
carrying places of the old days when commerce was 
conducted in canoes. Often built as the result of 
local or State enterprise, a short line was sufficient 
to use up the scanty capital available, or to exhaust 
the willingness of the people to be taxed for public 
improvements. The great systems of to-day repre- 
sent survivals of the fittest early ventures, and de- 
velopment according to environment. Thus the 
various small roads which traversed the present 
main line of the New York Central were not con- 
solidated until 1853, and the same year the roads 
between Philadelphia and Pittsburg came under one 
control. So late as 1862 there were five separate 
companies operating the lines between Lake Erie 
and Lake Michigan ; and as each road had a gauge 
of its own, it was regarded as a triumph in car con- 
struction when freight-cars of compromise gauge 
were built to run over all five roads. In 1869, 
however, the Lake Shore and Michigan Southern 
lines came under a single head. 

When, in October, 1865, a combination was 
formed among eight railroads to establish a fast 
freight line between New York and Boston and 
Chicago, the maximum difference in the gauges of 
the several lines was one inch ; and this was com- 
pensated for by a broad tread-wheel. Each com- 
pany contributed a number of cars proportionate to 
its mileage, one car for every three (afterward in- 
creased to one for every two) miles. In 1865 the 
quota of the Lake Shore and Northern Indiana was 
179 cars; while in 1894 that road's quota of Red 
Line cars was 2200. 

In 1862 the United States government conducted 
the greatest railroad business known up to that time. 
With headquarters at Nashville, the government 
operated 1500 miles of road with 18,000 men, 
whose monthly wages amounted to $2,200,000. 
The rolling stock consisted of 271 engines and 3000 
cars. No entirely new locomotives were built, but 
the 3000 men employed in the locomotive repair- 
shops pieced out fully equipped engines founded on 
a serviceable boiler or a pair of sound driving- 
wheels.i Among the triumphs of the national car- 
shops were, first, a headquarters car for General 
Thomas, the car being fifty feet long, iron-plated, 
and provided with a kitchen, a dining-room, a sleep- 
ing apartment, and an office ; and, secondly, the 
hospital-trains, in which the jars and jolts were 
reduced to a minimum. It was dimng the year 
1864 that General McCallum and Colonel Wyman 
came to Detroit and summoned the managers of the 
Michigan Car Company to stop all building then in 
progress and to work solely for the government. 
They gave a contract for a number of box and flat 
cars to be operated on Southern roads; and inas- 
much as the gauge differed from that of the North- 
ern roads, the new cars were loaded on flat cars and 
sent to Cincinnati. The government officials fixed 
the price of the cars and made payment in certifi- 
cates, some of which the company exchanged for 
materials, and the remainder were held until money 
could be obtained for them. 

The enormous transportation business developed 
by the war, together with the labor conditions and 
the paper-money issues, combined to raise the price 
of cars; so that the standard freight-car of 1864, a 
car twenty-eight feet long and with a capacity of 
ten tons, cost $1000 or more. To-day a car thirty- 
foiu" feet long, with a capacity of thirty tons, and 
provided with automatic couplers, air-brakes, and 
other improvements, can be purchased for about 

When the war ended the managers of railways 
were called on to face a heavy decline in both 
freight and passenger traflRc, due to the disbanding 
of the armies. Money was not plenty, cars were 
very expensive, and the mania for extending lines 
into new territory had begun. Under these condi- 
tions the roads began a system of borrowing cars 
from the builders or from car-trust companies. My 
impression is that the Michigan Car Company was 
the first to make contracts on a car-loaning basis; 
be that as it may, this company had at one time 

1 " Development of Transportation Systems in the United 
States," by J. L. Ringwalt (1888), p. 210. 

James McMillan. 



loaned to railroads between 6000 and 7000 cars, 
payment being made according to the car's mileage. 
With better times and better credit the roads began 
to buy cars for cash or on long time, as was most 
convenient ; and loaning freight-cars to railroads on 
a mileage basis practically has been discontinued. 
A majority of the refrigerator-cars, however, are still 
owned by private parties, and are run on a mileage 
basis. The recent reduction in the mileage rate from 
three fourths to three fifths of a cent has practically 
killed the business of private ownership, since the 
new rate does not much more than pay for the re- 

The sleeping-car had its beginnings as early as 
1838. The Baltimore "Chronicle" for October 
31st of that year described one such car that had 
been put on the line between Baltimore and Phila- 
delphia. The enthusiastic reporter related that the 
car had berths for twenty-four persons, and that for 
a small consideration the wearj'^ passenger might 
spend the six hours of travel between those cities 
as pleasantly as if he were asleep in his own bed. 
Nothing then seemed to be wanting except dining- 
cars, and those were promised for the near future — a 
promise, alas! not fulfilled for many a long year. 

Twenty years later, in 1858, George B. Gates 
invested $5000 in two sleeping-cars to run between 
Cleveland and BuiTalo ; but passengers could not be 
persuaded to use them. The same year the Hne 
between Toledo and Chicago was equipped with 
two sleeping-cars built by the Wason Company, 
of Springfield, Mass., and owned by Mr. Bates, 
of Utica, N. Y. These cars were fifty feet long, 
with sixteen sections in summer and fourteen in 
winter. When not in use, the bedding and curtains 
were stored in an end section ; and a single wash- 
basin and one saloon furnished the toilet conve- 
niences for the forty- eight persons the car was 
expected to carry. A sofa along the side of the car 
formed the lower berth, the middle one was hinged 
to the window-casing, and the upper berth rested 
on cleats fastened to permanent cross-partitions. 
It was while traveling in one of these cars, in 1858, 
that Mr. George M. Pullman began to plan the 
sleeping-cars that have revolutionized railway travel 
in this country, and are making their way in Europe, 
where comfort is less an essential to the traveler 
than it is in America. 

In 1859 Mr. Pullman transformed two Chicago 
and Alton coaches into better sleeping-cars than any 
others; but it was not until 1863 that the Pioneer, 
the first Pullman, was placed on the road. The car 
cost $18,000 — an astounding price in those days. 

It was higher and wider than most roads could admit, 
and it was not until President Lincoln's funeral that 
the roads between Chicago and Springfield nar- 
rowed their platforms and adapted their bridges so 
as to allow the Pioneer, carrying the funeral party, 
to pass over their lines. Shortly afterward General 
Grant's trip from Detroit to Galena, 111., in the 
same car, opened those lines to the Pioneer. After 
that time progress was rapid. The Pullman Com- 
pany was organized in 1867, and its success is too 
well known to need comment here. From the 
palace sleeping-car to the parlor and the dining- 
room car is a short step. But a long jump was 
taken in the vestibule, invented by Mr. Pullman in 
1887, by which trains are made solid and the plat- 
form is robbed of the last of its terrors. 

In the winter of 1868-69 the first Westinghouse 
air-brake was used on the Steubenville accommoda- 
tion train running on the Pittsburg, Cincinnati, and 
St. Louis Railroad. The Pennsylvania road adopted 
it, and since the automatic feature was added, in 
1873, it has come into almost universal use on pas- 
senger-trains, while by far the larger proportion of 
new freight-cars built are equipped with it.^ In 1887 
a train of fifty freight-cars made a triumphal tour of 
the great lines, and by repeated tests, under varying 
conditions, proved that the Westinghouse brake can 
stop a train in one tenth the space required by the 
hand-brake. In 1867 Colonel Miller placed his pat- 
ent platform, buffer, and coupler on three cars build- 
ing in the shops at Adrian, Mich. ; and with great 
rapidity the dangerous old platform, with its loose 
link-coupling, disappeared. In i860 the Post-Ofiice 
Department began to demand more room from the 
railroad companies, and year by year the mail-cars 
were increased from seventeen to twenty feet in 
length, then to thirty-five, and finally to sixty feet. 
The " Fast White Mail " now requires two trains 
each way between New York and Chicago. Each 
train is made up of six mail-cars, and the second 
train leaves New York three hours before the first 
train reaches Chicago. 

The interchange of cars among the various roads 
made it necessary to adopt standards in car con- 
struction, in order to facilitate repairs to cars when 
away from the home road. Some authority, too, 
was needed to settle disputes between roads, arising 
from charges for repairs ; to investigate new brakes 
and couplers; and, in general, to keep the work of 
construction fully abreast of the times. The Master 
Car Builders' Association, organized in 1867, amply 

1 Out of 331,094 freight-cars fitted with train-brakes up to 
June 30, 1894, 315,729 had the Westinghouse brake. 



fills this need ; and the reports of its annual meetings 
contain the latest word on all subjects relating to 
car building. Its arbitration committee also acts as 
a court of conciliation for the various roads. 

Few railroads in this country build their own cars, 
most roads finding it cheaper to buy of car com- 
panies, and to confine their own work to repairs. 
There are some exceptions. The Pennsylvania Com- 
pany, which is a large purchaser, in 1894 built 1963 
cars to replace its worn-out and damaged equipment, 
besides repairing 66,437. The maximum capacity 
of the Pennsylvania shops is twenty-eight cars a day, 
or about one half that of the largest works not con- 
ducted by a railway company.^ In June, 1 894, there 
were in the United States 33,018 passenger and i,- 
205,169 freight cars, besides 39,891 cars used in the 
service of the roads, and also the privately owned 
cars. Of the freight-cars, 25.20 per cent, are fitted 
with train-brakes, and 27.23 per cent, with auto- 
matic couplers. 

Prior to the panic of 1873 all the car- works were 
busy. That panic caused the failure of a large 
number of new railroads, which, in turn, forced into 
bankruptcy and eventual reorganization many car 
companies. From 1873 to 1879 the car-shops 
throughout the country were practically idle; but 
with the revival of business in 1878-79 the car- works 
again became busy, and, with the exception of a 
slight dullness in 1883-84, did a large and profitable 
business until 1893. The effect of the recent busi- 

1 " Railway Car Journal," March, 1895. 

■^ These figures are only for cars built by companies re- 
porting their output, and the statements, therefore, are com- 

ness depression on car building may easily be seen 
from the fact that in 1890, 103,000 freight-cars were 
built by fifty companies ; in 1893 the output of forty- 
three companies was only 51,216 cars; and in 1894 
the twenty-seven companies operating their plants 
turned out 17,029 cars. Fifteen companies that 
built 3000 freight and 300 passenger cars in 1893 
built not a single car in 1 894.2 The seventh annual 
report of the Inter-State Commerce Commission is 
authority for the statement that the increase in the 
total number of cars during the fiscal year 1 894 was 
but 4132, as against 58,854 in 1893. With the re- 
vival of business the car companies are again start- 
ing up. The average life of a freight-car being from 
fourteen to twenty years, at least 75,000 cars must 
be built each year to repair the ravages of time ; be- 
sides the cars required to make good the losses by 
accidents and for the increase in mileage and busi- 

The transportation of various kinds of products, 
such as live-stock, dressed meat, oil, and timber, 
has called into being cars especially adapted to each 
class of freight, so that scores of different kinds of 
cars are now constructed to answer the demands of 
the shippers. Within the past year electricity has 
been used as a motive power for both freight and 
passenger cars, and possibly in the future each 
freight-car will be equipped with an overhead trolley 
whereby it can move independently of the train on 
branch roads and for switching purposes. At all 
events, if the future is to be judged by the past, 
great changes in transportation are likely to come 
suddenly, and to seciu-e wide-spread adoption in the 
minimum of time. 



THE revival of American shipping has been 
scarcely more than a hope of the American 
people for more than thirty years. By a 
revival of this industry is meant the reappearance, 
in frequent and constantly increasing numbers, of 
American-built ships for our commerce with other 
nations, rather than for our own internal or coast- 
wise trade. This has been a theme, and more or 
less a dream, for statesmen, capitalists, manufactur- 
ers, and all patriotic citizens. All have recognized 
that complete national independence without a mer- 
chant marine proportionate to our standing as a 
nation is impossible. All thoughtful citizens under- 
stand that, so far as our foreign commerce is con- 
cerned, we are to-day, as we have been for a long 
time, practically in subjection to the trade impulses 
of Great Britain. If England should place an em- 
bargo upon us we should be practically helpless — 
for a considerable time, at least — in our trade with 
other nations. All agree that American shipping 
should be revived. It is as to the best method of 
reviving it that we disagree. There can be no 
doubt that this disagreement has been a national 

The creation of a new navy, or, strictly speaking, 
the beginning of a new navy, and the recent build- 
ing of two notable specimens of marine architecture 
for the transatlantic trade, have caused many per- 
sons to think, and a few to assert, that the revival has 
come already. Every one wishes that this were 
true. The fact is, these are simply indications of a 
revival of this splendid art and trade. We have 
shown most emphatically in the last ten years that 
we can not only build ships equal to the best of 
foreign construction, but actually superior to them, 
ship for ship, in finish and in results. Moreover, 
we have so wonderfully progressed in these ten 
years that we can now actually build ships at only 
a trifle more in first cost than the most progressive 
of foreign ship builders. 

Nevertheless we cannot say truthfully that Amer- 
ican ship building has revived. As a people we 
have risen to a height from which we can see the 
promised land. We have yet to enter into it. Ex- 
cept for the creation of this new navy, and for the 
insistence of such men as Secretaries Whitney and 
Tracy, of our Navy Department, that our war-ships 
should be entirely of American make, notwithstand- 
ing that at first they would cost more than if we had 
them built in England, the ship-building industry of 
this country for foreign trade would be practically 
paralyzed to-day. The most, therefore, that can be 
said is that we can now build our own ships, and 
that manufacturers are ready at any minute to enter 
upon the work. This of itself is a tremendous gain, 
and is the first step — the one of greatest importance, 
perhaps — toward the completion of our indepen- 
dence of all other nations. The situation is, there- 
fore, one of promise. 

Ship building began in this country in the earliest 
colonial times. It was fairly well established in 
New England in 1640. It began on the Delaware 
in 1683. The conflicts in Europe made it neces- 
sary for the early Americans to build their own ves- 
sels. The industry had its vicissitudes, like the col- 
onists themselves, for a century. In 1 740, however. 
New England had no less than 1000 sail in the 
fishing trade. In 1770 Massachusetts built nearly 
one half of the American ships. At the beginning 
of the Revolution the American tonnage amounted 
to 398,000. It comprised nearly one third of Great 
Britain's entire tonnage. Philadelphia had then 
come to be the leading center of the industry here. 
The trade of this country was then largely with the 
West Indies, and Philadelphia was a most accessible 
port for the products of those islands. 

In 1793 Philadelphia built double the number of 
ships that any other place in the United States fur- 
nished. In 1800 the tonnage of American shipping 
was put down at 669,921. The War of 1812 caused 




a sharp decline, but in 1815 there came a great re- 
vival. It dropped in 1 820, and recovered somewhat 
in 1830. In 1835 it went lower than for any other 
year of the century, but forthwith there came the 
greatest time of prosperity in the industry, which 
culminated in 1855. The tonnage for representative 
years of these periods is recorded: 1820, 47,784; 
1830,58,094; 1835,46,238; 1845,146,018; 1850, 
272,218; 1855, 583,450. 

Then carrie the decline for twenty years. It was 
about as rapid as the increase for twenty years had 
been. In 1855 we built 381 ships and barks, and 
126 brigs. In 1875 we built 114 ships and barks, 
and 22 brigs. In 1885 we built 11 ships and 
barks, and no brigs. We built no steamers for for- 
eign trade. The last census showed that there were 
more than 1000 ship-building plants in the United 
States. Most of them were small affairs. They 
were occupied in building all sorts of craft for our 
own waters, chiefly for the large landlocked com- 
merce of our lakes, and, of course, scarcely enter, 
so far as their product is concerned, into a consid- 
eration of the revival of American shipping as it is 
commonly understood. 

There should be little need to recount the causes 
for the decline in this country of this noble indus- 
try. Nature intended us to be a seafaring people, 
and for eighty years we were such. In the begin- 
ning of this century we not only surpassed other 
nations in the quality of our ships, but we could 
build them cheaper than England could build her 
vessels. We had splendid forests and hardy, fear- 
less sailors. Year by year we increased our output 
in this industry, so that when the decade from 1850 
to i860 was reached we were second in rank in this 
industry, and in i860 so close to England that there 
was practically no difference between the two 
nations. Soon after the year 1840, however, Eng- 
land's forests had begun to show serious depletion. 
It becanie necessary, after a time, for her to import 
the greater part of her materials for building ships. 
Tools were then invented for the working of iron 
for ship building. She had plenty of iron in her 
hills, and forthwith the iron ships began to appear, 
slowly at first, but none the less surely and steadily. 

There was no such incentive in this country for 
iron ships, the feasibility of which had been demon- 
strated for forty years or more. Our forests were 
still plentiful and close at hand. Our experience 
with wooden ships had been profitable. The indus- 
try was increasing all the time. There was little 
need for a drastic change in our system of manu- 
facture. The gold fever was upon us, and the tide 

of immigration was sweeping to our shores in a 
mighty current. There was no time for any change 
in our methods, even had we been inchned to make 
one. From a fleet of 201,562 tonnage in 1789, we 
had grown to a fleet of 5,353,868 tonnage in i860. 
In the latter year, the entire tonnage of the whole 
British empire was only 5,710,968. Truly an im- 
pressive showing was ours. 

The Civil War came. For a time our shipping 
showed no marked decline. Then it began to go 
down. The Confederate privateers, built in Eng- 
land, began to sweep the seas. American ships 
with hundreds of thousands of tonnage sought the 
English flag for protection. Year by year we built 
fewer ships. When the war ended we had practi- 
cally ceased to be a maritime nation. We were at 
the threshold of a magnificent interior development 
of oiu own country. Otu* capitalists could not begin 
to furnish the money needed in this work. We 
had to go to England, even as we have been doing 
in recent years, to borrow money to build the in- 
tricate and amazing network of our railroads. New 
methods had come into the ship-building industry. 
The business had become revolutionized. Eng- 
land had taken full advantage of her opportunity. 
She had fostered the industry by placing her govern- 
ment work in private yards. Her plants had been 
established on a broad scale, and a resulting cheap- 
ening in cost of production had followed. The 
United States was out of the race. Her forests 
near the coasts were depleted. When we built our 
first battle-ship, the New Ironsides, in 1863, the tim- 
bers used in her were cut within twenty-five miles 
of Philadelphia. The great interior development of 
the country had swept all such forest supplies away. 
Labor was costly. This made the product of oiu- 
iron-mines most expensive, and as a people we found 
that one of the results of the great Civil War was 
the destruction of oiu* shipping industry, and, de- 
plorable as it well may seem, and not yet fully 
understood by all our people, we were commercially 
dependent once more upon Great Britain. The ris- 
ing cloud of our internal prosperity hid this from the 
eyes of most of our people, but fact it was and is 

England had become mistress of the seas. With 
an eye single to her commercial interests — at once 
the explanation of all her statecraft — she resolved to 
maintain her supremacy. To-day she is as resolute 
in her purpose as she was thirty years ago. Her 
shipping is the sign whereby she conquers in the 
mercantile world. It is the standing proof of her 
national prowess and independence. With keen 



foresight she resolved that this conquering industry 
should not become stagnant. She enrolled certain 
of the steam-craft in the reserve force of her navy, 
paying the yearly rate of twenty shillings per ton to 
their owners. She established liberal subsidies for 
carrying the mails. She recognized that a ship 
carrying the British flag was something more than 
the private property of the individual owner. The 
nation had a share of ownership in every such 

Recognizing that this country could never have 
complete national independence without a merchant 
marine, American capitalists in 1870 decided to 
make a start in bringing about a revival. Four 
vessels were built for the transatlantic trade in the 
Cramp shipyard. They were the Ohio, Indiana, 
Pennsylvania, and IIli?wis. They were equal to any 
vessels of their day, and a credit to the industry and 
to the nation. England met their advent with in 
creased subsidies. The American vessels had no 
such aid, and had to fight their way in commercial 
rivalry. It was not a winning fight. Ship building 
here was confined thereafter to building coastwise 
vessels. The industry sank to such a low stage that 
when, in 1882, we started to build a new navy, the 
English newspapers scoffed at the idea that we could 
produce either hulls or engines. They finally ad- 
mitted that we could build the hulls, but for us to 
make the complex modern marine engine was out of 
the question. Congress gave the Secretary of the 
Navy power to get abroad what he wanted in this 
respect, but Messrs. Whitney and Tracy resolutely 
refused to take advantage of the privilege. 

When we started in this work of building a navy 
we had no mills in which to roll the plates, no 
foundries to make the great castings, no forges to 
fashion the shafts and gun forgings, no plants to 
supply our armor. It had taken England thirty 
years or more to equip herself with these appliances. 
What have we done? In ten years, practically, we 
have gone to the front. Our marine engines and 
boilers are and for years have been confessedly the 
best in the world. Not one of our new war-ships 
has broken down when put to a test of four hours' 
work at its maximum power, and none has been in- 
jured in the slightest by such an enormous trial of 
endurance. On the contrary, no English war-ship 
has been equal to such a task. The English experts 
freely admit that we have won supremacy in this re- 
spect. Our ships are acknowledged to be superior 
in finish. There is one simple explanation for this : 
workmen in American shipyards get nearly double 
the wages of workmen in English shipyards, and a 

better-paid man always does better work. Our 
designers have made distinct advances over their 
English competitors. The Indiana class of battle- 
ships proves this. With vessels only two thirds the 
size of the English Royal Sovereign class, the Indiana 
class has a greater fighting capacity and as much 
speed and endurance. Moreover, the recent trial of 
Xht Indiana herself demonstrated that she was a signal 
success in the one respect where English ships fail 
oftenest, the matter of stability. Lack of stability 
has been the crowning fault of foreign battle-ships. 
No steadier ships will float than these new battle- 
ships of ours. 

In addition to all this, we have produced the two 
fastest war-ships of large size in the world, the Co- 
lumbia and Minneapolis. England became aroused 
by their appearance, and she answered our success 
by ordering two vessels of stupendous dimensions, 
the Powerful and Terrible, for the sole purpose of 
outclassing them. The creation of this new navy 
has stimulated ship building in many yards. On the 
Pacific coast, in New England, in Maryland, even 
on the Mississippi River, as well as on the historic 
Delaware, we have proved our ability to compete 
with all the world in the making of ships of every 
kind. Our mills and forges and foundries cannot be 
surpassed anywhere, and a striking triumph of our 
skill is shown by the fact that Russia has recently 
placed two orders for armor in this country, to the 
exclusion of all the plants of Europe. 

Our skill had become so thoroughly demonstrated 
that three years ago American capital, encouraged 
by legislation providing for a moderate compensa- 
tion for carrying the mails, — much less than that 
which England pays for the same work, — decided to 
make another start in the revival of our merchant 
marine. We admitted two vessels to American 
register, — the JVew York and Paris, of the Inter- 
national Navigation Company's line, — upon the ex- 
press condition that two more vessels equal to them 
in size and capabilities should be built in American 
yards. Congress guaranteed a payment of $4 a 
mile to these ships for carrying the mails to foreign 
countries, upon the condition that they should show 
themselves capable of maintaining a sustained speed 
of twenty knots an hour. As a result of this the 
St. Louis and St. Paul were built, and in October, 
1895, the mail-carrying contract went into effect. 
The St. Louis and St. Paul have shown, in the short 
time they have been in service, their splendid worth ; 
and the hearty reception given to them by the entire 
country speaks well for the patriotism of the Ameri- 
can people, and is of itself a most hopeful sign. The 



Sf. Louis, on her official trial in Great Britain, made 
an average of twenty-two knots an hour. 

This, then, is the condition of our ship building 
to-day. In ten years we have built, in round num- 
bers, fifty most creditable vessels for the new navy, 
and two fine specimens of ocean-going passenger- 
craft. The reports of the Navigation Commissioner 
show, as is pointed out by Mr. Chamberlain in an- 
other chapter of this work, that, of the ten leading 
countries of the globe, Italy and the United States 
alone show a decHne in this industry since 1875. 
The tonnage of Great Britain for 1895 is placed at 
27,885,806. That of Germany, now the second 
maritime power, is 4,065,282. The United States 
comes next, with a tonnage of 3,261,982, a decline 
in twenty years of nearly 1,000,000 tons. In twenty 
years Germany has increased her tonnage nearly 
3,000,000 tons. Perhaps an incident in the experi- 
ence of a young woman who several years ago made 
a spectacular trip around the world for a New York 
newspaper will illustrate the extent of the decline of 
American shipping better than any set of figures. 
The last instructions given to. this young woman 
were to make note of the number of times and the 
occasions on which she might see the American flag 
on vessels during her journey. When she came 
back she reported that not once did she see a vessel 
flying the American flag from the time she left New 
York until she reached San Francisco. Nothing 
more need be said, therefore, to show the complete 
prostration of this industry, notwithstanding the fact 
that we have built the nucleus of a new navy in ten 
years, and are now in a position to build ships of any 
kind and any speed within the limits of recognized 

The great question, therefore, is. How shall our 
merchant marine be restored? With no desire to 
manifest a controversial spirit in these pages, I think 
every one who has studied this question agrees that 
national . legislation of some kind is necessary. On 
the one hand, some assert that the repeal of the navi- 
gation law passed December 31, 1792, is necessary. 
This act specifically closed American registry to 
foreign-built ships, except those taken as prizes in 
war. Its repeal would give us free ships. We could 
buy vessels, if this act were removed from the statute- 
books, at English prices. On the other hand, those 
who oppose the repeal of this act assert that what 
is needed is government aid similar to that which 
England and most other nations give to their ship- 
ping industries. These advocate the adoption of 
one or all of three kinds of government assistance. 
The first is special compensation to special lines of 

steamships ; the next is a general bounty on tonnage 
to all ships ; the third is a liberal compensation to 
oiu: vessels, according to size and grade, for carrying 
the United States mails. 

Now, ehminating any question of partisanship in 
discussing this matter, I think that no one will dis- 
pute that probably the most powerful incentive to the 
growth of the shipping of Great Britain has been this 
matter of government aid. It will also be admitted 
by all those who have examined the question histor- 
ically that our law of 1792 was intended to promote 
our national independence rather than to foster an 
industry by a protective system. In those days the 
industry needed no protection, because it was ad- 
mitted, and had been proved beyond any doubt, that 
we could build ships cheaper than any of our rivals. 
In 1789, James Madison, then a member of the 
House of Representatives, said that our capacity 
for increasing the tonnage of our ships " gives us 
a favorable presage of our future independence." 
Moreover, there is conclusive proof that this navi- 
gation law did not interfere with the growth of our 
shipping. It has been in effect from the day it was 
passed until now. When we were at the height of 
otu" prosperity in shipping the law was in actual 
operation, just as it is to-day, in the time of the 
prostration of this industry. 

It would seem, also, that we all ought to agree 
that if this law were repealed these things would 
happen : England, under our natural desire to buy 
as cheaply as possible, would unload her poorest 
vessels on us, and her shipyards would reap a bene- 
fit in an enormous activity in building new vessels 
for her own use. A new market would be opened 
for the relief of the over-developed Enghsh ship- 
yards, now sorely languishing because other nations 
are beginning to build their own vessels. It ought 
also to be admitted that in time of war England 
would be able, by a series of sales easy to accom- 
plish, to transfer her merchant marine to the Ameri- 
can flag, and thus escape the terrible penalty that 
must befall her in case she should enter into conflict 
with any other nation. Her immense shipping is a 
perpetual bond upon her not to engage in warfare. 
If she could make an asylum of the American flag 
temporarily she could resume control of her shipping 
when hostilities were at an end. 

As to the effect on the shipping industry of this 
country, it is generally conceded that the repeal of 
the navigation law would wreck the industry as at 
present organized here. Those who favor this plan 
see no reason why the government should foster any 
single industry. Such vessels as England produces 



she could build cheaper than we could build them. 
The argument that our yards would be kept busy 
with repair-work and building ships for the coast- 
wise trade would fail, because repair-plants are of an 
entirely different character from constructing plants. 
If we could import ships for the foreign trade we 
ought to have the same privilege for our coastwise 
trade. A discrimination between the two kinds of 
trade would be absolutely unjust to our mercantile 
interests. Again, if we could get our ships at Eng- 
lish prices, we should be confronted by the fact that 
England, to retain her supremacy, would doubtless 
continue to insist on her liberal policy of govern- 
ment aid to her ships, and to hold her own would 
probably increase that aid at once. It is difficult 
to see how, under these circumstances, we could 
compete with her in the commerce of the world. 
By unloading her least desirable vessels on us she 
would have better ships, and these, with favoring 
legislation, would place us at once under a disad- 

It is for this reason that the advocates of govern- 
ment aid have declared for a so-called bounty system 
in this country. We use this system in our inland 
commerce extensively. We pay large sums every 
year to the railroads for carrying the mails. In that 
case we call it a compensation. It is called a 
" bounty " when we give such aid to ships. Why 
should subsidies of land be given to the great 
railroads and not to the ship-building interests ? 
Enormous grants of land have been allotted by the 
government to the great railway companies, and 
these very roads, fattened on government patronage, 
are now giving the preference of business at their 
terminals to foreign bottoms, to the exclusion of 
American ships, as is the case at Pensacola, New- 
port News, New Orleans, and on the Paciiic coast. 
All the advocates of a general tonnage bounty, if 
such a term is to be used, declare that within ten 
years after the passage of such a law we should be 
practically independent of every nation in the matter 
of ships. Many such bills have been introduced in 
Congress, but there seems little prospect at present 
that any such law will be passed. Three years ago 
we did adopt a scale of compensation for American 
vessels carrying the mails to foreign countries. The 
contract has just gone into effect. It requires from 
two to three years to build ships such as the Sf. Louis 
and St. Paul. The post-office authorities at first re- 
ported that the new law seemed to have little effect. 
By special legislation the New York and Paris were 
admitted to American register, and now, for the first 
time in our history, we are to have an actual trial of 

the effect of this kind of government encouragement 
of our shipping industry. 

The system is to run for ten years. What the re- 
sult will be time alone will tell, but this much can 
already be said : it has added to our naval reserve 
fleet four magnificent specimens of marine archi- 
tecture, capable of immense use in time of war as 
commerce destroyers. The money paid to them for 
carrying the mails is much less than it would cost 
us to keep actual war-ships of that grade in commis- 
sion. It would take only a short time to equip them 
as war-ships, and plans for that purpose have already 
been drawn. If a general tonnage law cannot be 
passed, we are assured of a fair trial of the mail- 
carrying compensation system. Already in the build- 
ing of the St. Louis and St. Paul it has had some 
effect. It is doubtful if this system of itself will be 
sufficient to restore the ship-building industry. The 
fact that our capitalists are willing to try the experi- 
ment is most encouraging. 

If, however, the matter of government aid, as now 
constituted, should fail, the future is not entirely 
without hope. The period of enormous internal 
development of our country seems to be ending. 
Our railroads are practically built ; our mines are 
developed. The time for amassing great fortunes 
may be said to be past. Only in the line of the 
development of real estate do opportunities for 
making large fortunes seem to remain. In all 
grades of mercantile interests there will be close com- 
petition. Nevertheless the country has accumulated 
a vast amount of wealth, and it is beginning to seek 
investment. The fact of the appearance of the 
St. Louis and St. Paul is proof of this. As time 
goes on it must be that our wealth will increase. 
As the margin of profits on present investments 
grows less, new fields will be opened. If it can be 
shown that a reasonable profit will follow investments 
in ships, slowly but surely the industry will revive 
without the stimulus of government assistance. This 
must needs be a matter of extremely slow growth. 

By the creation of a new navy our shipyards may 
be kept in condition to build this new merchant 
marine, if it shall come within a reasonable time. 
Naval work alone, however, is not sufficient to re- 
store our shipyards to complete efficiency. At best 
there is very little profit in government work. It is 
surrounded by such a system of slow and intricate 
inspection and approval, of rigid rules and regula- 
tions, that rapid work is impeded, and freedom to 
make changes in the legitimate hne of develop- 
ment of the industry is prevented. Then, too, gov- 
ernment work is intermittent in character. Although 



it is inadvisable to fix a set program of naval develop- 
ment, owing to vast and constant changes that are 
being made in this branch of warfare, it is a fact 
that to keep the ship-building industry as at present 
constituted at its fullest capability there should be 
a steady and comprehensive advance movement in 
adding to our fleets. The argument that it is not 
the province of the government to stimulate any 
single industry to the exclusion of another and to the 
private benefit of individuals loses its force when 
we consider that a merchant marine is necessary to 
the commercial independence of any country with 
extended sea-coasts. 

It is a fact that cannot be disputed that so timid 
is capital that it will not invest in ships unless the 
flag they carry is assured of complete protection by 
a navy. England's naval policy is to be interpreted 
alone on these lines. A navy capable of maintain- 
ing the dignity of a nation is not a constant menace 
to peace. It is the best guaranty to the develop- 
ment of commerce that any nation can give. It 
means, under proper conditions, the prophecy of a 
merchant marine. The steady development of a 
well-defined policy in naval construction, therefore, 
means the maintenance to a certain extent of ship- 
yards which will be ready to build a merchant 
marine as soon as there are war-ships in sufficient 
quantity to protect it, and money and government 
aid sufficient to start it. 

Under present conditions, therefore, the future is 
one of promise. It may be several decades before 
our flag is even partially restored to the high seas. 
The revival of our merchant marine must surely 
come in time if we continue in the rate of prosperity 
that has marked our development for the last thirty 
years. It will come sooner if liberal aid is given 

by the government. So complex are the subsidiary 
industries in the present condition of building ships 
that the revival will affect not only capitalists along 
the coasts and elsewhere, but will employ a vast 
army of men in the interior as well as along the 
seaboard. The probable completion of the Nica- 
ragua Canal will cause, undoubtedly, an immense 
stimulus to American commerce. Whether those 
who oppose the system of government aid on gen- 
eral principles, owing to their views as to the proper 
function of a nation, are right or not, is it not worth 
considering if it would not be well for especial rea- 
sons to be ready to carry this coming commerce of 
the United States in American ships? Once started 
on the road to prosperity, who that knows the char- 
acter of the American people can doubt the result? 
A fine specimen of marine architecture is always 
a standing lesson in patriotism. It is required to 
display the flag of its country. As it passes from 
port to port it is more than a mere floating vehicle 
for commerce. It is a bit of its nation's soil. 
Around its existence and its journey ings the ro- 
mance of travel and the dignity of nationality center. 
No other manufactured thing is so complex or 
delicate. It tells a story of national progress such 
as nothing else can tell. It speaks of home to the 
citizen in foreign lands. It means prosperity for 
those at home and abroad ; for every vessel added 
to the fleet of any nation means more commerce, 
more trade. No patriotic citizen should relax his 
efforts to secure a revival of this industry in this 
country in some form or other. We have the mills, 
we have the men, we are just beginning to have the 
money, and we have the materials in rare abundance. 
The situation calls for the wisest statesmanship, the 
loftiest patriotism, the noblest effort. 


Charles H. Cramp. 



THE first real manifestation of telegraphy as 
an applied art dates from just one hundred 
and one years ago, and to Claude Chappe, a 
Frenchman, is due the discovery of it and its possi- 
bilities. It was a visual telegraph or semaphore 
that Chappe invented, and for the better part of 
a half-century afterward it was the only quick mode 
for communicating at a distance that Europe knew. 
An ingeniously contrived signal-code and perfected 
mechanical appliances made this semaphore-tele- 
graph not only most useful, but very rapid, a des- 
patch traveling at the rate of from fifteen to twenty 
miles a minute on the main lines. It was introduced 
in France in 1 794, and, after the populace had de- 
stroyed the signal-towers several times, it was finally 
completed in time for the first message sent over it 
to be the thrilling news of a French victory. " Conde 
is taken from the Austrians," came the signaled 
words from the frontier within three or four hours 
after the event, and Paris went wild. Chappe was 
as great an idol as he had before been an object of 
hatred, and his telegraph became the wonder of the 
day. Europe followed France in 1802 in introduc- 
ing Chappe's idea, and England shortly afterward, 
in 1823, made use of it at home and in India. It 
was, in fact, the common telegraphic system of the 
world up to the time when the invention of the 
electric telegraph upset all previous ideas of human 

The germ of the idea which came, in Chappe's 
hands, to full development was first seen in the sig- 
nal used by the Americans during the Revolutionary 
War. This consisted of a barrel on the top of a 
high pole or mast, on which was, furthermore, a 
movable yard or arm to which a basket was attached. 
To each of the different positions of this arm a 
meaning was given, and signals could be sent many 
miles by these means. While it is certain that 
Chappe never saw this contrivance, the similarity of 
its elementary design with that of his telegraph gives 

them a direct connection. The semaphore-telegraph 
was in use, with an elaborate system of signals, in 
this country for many years prior to 1850. It was 
the means for communicating news of incoming 
ships from the Highlands of New Jersey to New 
York, where the signal-tower was located in the 
dome of the old Merchants' Exchange, now the 

Before entering upon the detailed history of the 
modern telegraph, a brief diversion will be necessary. 
No fitting idea of the glorious successes it has at- 
tained could be conveyed were the earlier discover- 
ies and experiments in electrical phenomena to be 
omitted. Electricity is to the telegraph as steam 
to the motive engine or gravity to the universe — the 
force that makes it possible. The discovery that 
amber (from the Greek name of which the word 
" electricity " is derived) became electrified under 
friction is an old one, but the reduction of this dis- 
covery to anything like scientific analysis or classifi- 
cation only dates from about the middle of the last 
century. In the list of those whose discoveries have 
borne the most important relation to the develop- 
ment of this wonderful science the names of Ameri- 
cans are at the head. Europe reverences the glory 
of Galvani, Volta, Oersted, Arago, Ampere, and 
Steinheil, while England vaunts her Cooke, Wheat- 
stone, and Bain; but above them all are written 
the names of Frankhn, Henry, and Morse. 

It was in 1747, the year after the discoveries 
which developed the Leyden jar and the principle 
of the restoration of electric equilibrium, that Ben- 
jamin Franklin first interested himself in the phe- 
nomena of electricity. A letter from Peter Collinson, 
fellow of the Royal Society of London, to the 
Literary Society of Philadelphia, of which Franklin 
was a member, interested the latter, and he then 
began by his reply that interesting series of letters, 
continuing for many years, in which he laid down, 
and later proved, so many propositions, since be- 




come axiomatic, but totally at variance with the 
accepted European theories of that day. In 1749 
he declared electricity and lightning identical, and 
in June, 1752, proved it by the celebrated kite sent 
up during a thunder-storm. Franklin was succeeded 
in America by Professor Joseph Henry, in after 
years connected so prominently with the Smithsonian 
Institute. At the time when this distinguished sa- 
vant was commencing his researches, and just be 
fore, great discoveries were being made in Europe. 
Coulomb in 1785 laid the foundation of electrostat- 
ics. Galvani, of Bologna, in 1790 discovered by 
accident that metallic connection between the crural 
nerve and the legs of a frog caused convulsive 
action. He ascribed it to animal electricity, and 
all the physiologists of Europe adopted his theory. 
The electricians, however, doubted, and in 1800 
Professor Volta, of Pavia, demonstrated beyond a 
doubt that the effect produced was through elec- 
tricity generated chemically. In proving this he 
brought out the voltaic pile, which was the first the 
scientific world knew of any electricity other than 
static or frictional. On this discovery of Volta, 
affording, as it did, a current electricity, together 
with the subsequent discovery of electro-magnetism 
by Professor Christian Oersted, of Copenhagen, in 
1819, is based the electric telegraph of to-day. The 
voltaic pile, to which improvements were early 
made by Cruikshank, Daniell, Smee, Bunsen, Grove, 
Chester, and by many others since, is the battery 
of to-day ; and Oersted's electro-magnetism, in the 
hands of Schweigger, Arago, Ampere, Sturgeon, and 
finally Henry, has afforded the electro-magnets, 
giving the principle on which were based the old 
English deflecting-needle telegraphs and the present 
Morse instruments. 

These discoveries in electrical science, the latest 
of which was in 1825, left the field free for the pio- 
neer who should carry forth the telegraph. Many 
had already essayed this honor, but the man and the 
time were not yet in conjunction. So early as 1749 
Franklin had sent a current through a long wire 
across the Schuylkill, and in 1753 Charles Marshall, 
of Paisley, Scotland, had proposed a telegraph with 
a wire for each letter. 

Among the many who have originated forms of 
electric telegraph are an Englishman named Lo- 
mond, who in 1787 is said to have operated a short 
telegraph line on his front lawn ; Reizen, who in 
1794 invented the illuminated-letter telegraph by 
the application of the broken current ; Salva, a 
Spaniard, in 1798, who used electrified pith-balls; 
Samuel Thomas Sommering, who in 1809 first 

applied the current from the voltaic pile to tele- 
graphing; Ronald, in 18 16; Gauss and Weber, of 
Gottingen, who brought out the magnetic-movement 
mirror and glass in 1 833 ; and Steinheil, who in 
1838 discovered the " earth-circuit," which did away 
with the previously supposed indispensable return- 
wire to bring the current back to the battery. 
Steinheil also invented a system of telegraphy, and 
ran his wires on poles with insulated attachments. 
Across the Channel, William Fothergill Cooke, hav- 
ing invented a magnetic-needle telegraph in 1836, 
associated himself with Professor Wheatstone the 
succeeding year, and introduced his invention to 
general use. The needle -telegraph in various and 
improved forms, and Bain's electro-chemical tele- 
graph, continued to be the ones used in England up 
to a late date, and were supplanted by the Morse 
system only when the latter became practically 

Of the early telegraphers there is one whose 
name, too nearly forgotten, had almost been written 
before that of Morse on the roll of fame. This 
man was Harrison Gray Dyar, and the evidence is 
strong that so early as 1827 he had erected and 
operated, upon a certain Long Island race-track, a 
telegraph line strung upon poles with glass insula- 
tors. This telegraph communicated signals by the 
discoloration produced by the electric ciurent upon 
a piece of moving litmus-paper, which had been 
previously moistened. Dyar used only frictional 
electricity, and was therefore unable to attain 
results so eminently successful as those of inven- 
tors after 1835, who could apply the wonderfully 
improved device of the Daniell cell in supplying 
their current. An attempt made by Dyar to intro- 
duce his telegraph to general use encountered intense 
prejudice, and, becoming frightened at some of the 
manifestations of this feeling, he left the country. 

Meantime, while all these claims were advancing, 
the one preeminently great invention was rapidly 
maturing on this side of the Atlantic Ocean. In 
1832 the transatlantic packet Sully, bound for New 
York from Havre, had on board among her passen- 
gers a distinguished historical painter named Samuel 
Finley Breese Morse. In the long evening talks in 
the passengers' cabin the subject of electricity and 
the electric current was brought up one night. A 
well-known professor of sciences. Dr. Jackson, made 
the statement that an electric current would manifest 
itself at the distant end of a conducting wire in- 
stantaneously. The remark, made in the course 
of conversation, impressed Professor Morse deeply, 
and going to his state-room, he commenced work on 



the application of this space-annihilating current to 
the transmission of intelligence. Before the Sully 
reached her dock the thing was accomphshed — in 
the inventor's mind, at least ; and certain drawings 
and explanations made by him at that time, and 
sworn to by the captain, were later produced before 
the Supreme Court during the suits by which the 
validity, scope, and priority of the Morse patents 
were fully confirmed. 

On landing, Professor Morse constructed his first 
machine, making the type himself for his famous 
alphabet, which stands to-day as the most wonder- 
ful piece of cryptography ever devised. Lack of 
funds was a great drawback to the inventor, both 
at this time and for many years to come ; but in 
November, 1835, he successfully exhibited his tele- 
graph in a large room of the New York City Uni- 
versity, transmitting a message through a long wire. 
Among those who witnessed this first exhibition of 
the electric telegraph were Leonard D, Gale, D. 
Huntington, O. Loomis, and Robert Rankin. The 
following year the invention was on public exhibi- 
tion in New York, and in February, 1837, when 
Congress passed a resolution requesting the Secre- 
tary of the Treasury to report upon some method 
of electric telegraphing, the claims of Morse were 
strongly presented, and in April, 1838, the Commit- 
tee of Commerce of Congress made a unanimous 
report of the most favorable tenor upon the Morse 
invention. The chairman of this committee, Hon. 
Francis O. J. Smith, characterized Morse's telegraph 
as the " most wondrous birth of this wonder-teeming 
age." So impressed was Mr. Smith with the great 
possibilities of the telegraph that he resigned his 
seat as a member of Congress and purchased a 
quarter interest in the Morse rights. The other 
members of Mr. Smith's committee, whose names 
appear signed to the unanimous and earliest indorse- 
ment of the value of Professor Morse's discovery, 
were S. C. Phillips, Samuel Cushman, John I. de 
Graff, Edward Curtis, James M. Mason, John T. H. 
Worthington, William H. Hunter, and George W. 

The recommendation of this committee to the 
contrary notwithstanding. Congress refused to ap- 
propriate the $30,000 asked by Morse to construct 
an experimental line. Mr. Smith and Professor 
Morse accordingly sailed for Eiu-ope to attempt its 
introduction there. Their mission proved a failure, 
patents being refused them in England on the 
ground that a partial description of the Morse 
system had been published. In France a patent 
was issued, only to be withdrawn. Returning to 

this country, Professor Morse received his letters 
patent in June, 1840, based on the specifications of 
his application in April, 1838. In 1842 he again 
presented his invention before Congress, asking an 
appropriation of $30,000. The House promptly 
passed it (see report on the debate, p. 461 of Prime), 
but the session dragged along and the traditional 
delay of the Senate kept the bill from reaching a 
hearing. On the last night of the last day of the 
session, March 3, 1843, Professor Morse waited in 
the Senate corridors until late in the evening, when, 
believing his cause hopeless, he returned to his hotel 
almost broken-hearted. Had he but known it, one 
of the last acts of the Senate during the very last 
hour was to take up the Morse appropriation. 
Singularly enough, no dignified questioner arose to 
ask for information concerning the bill, which would 
have required time and so proved fatal to it, but it 
was straightway passed, and early the next morning 
the news was brought to Professor Morse by Miss 
Annie Ellsworth, to whom the overjoyed inventor 
then and there promised the honor, which she 
afterward enjoyed, of sending the first message when 
the line should be completed. 

The condition under which Professor Morse 
received the $30,000 was that he should use it in 
the construction of a line of electric telegraph from 
Baltimore to Washington. He immediately com- 
menced work on this line ; but his early efforts were 
wholly useless, owing to a serious mistake in his 
plans. He projected a subterranean line, and for 
this purpose two copper wires covered with cotton 
and gum lac were drawn through a lead tube. A 
deep furrow was then made with a heavy plow, and 
the pipe laid as far as the relay-house, nine miles 
from Baltimore. (See Cornell's account in the 
" Biography of E. Cornell.") It was then discov- 
ered that an earth-circuit was formed and the wires 
refused to work. The greater part of the appropri- 
ation having been thus unsuccessfully expended, 
Professor Morse was in great trouble ; but finally, 
by withdrawing all the wire from the miles of lead 
pipe and stringing it on poles above-ground, the 
line was completed in May, 1844, and on the 27th 
of that month the first despatch, " What hath God 
wrought!" flashed over the wires from Washington 
to Baltimore, being sent by Miss Annie Ellsworth, 
as long before agreed. Professor Morse's manipu- 
lating as.sistants at this trial were Mr. Alfred Vail, 
who in 1837 had invented and patented a printing- 
telegraph, and Mr. L. F. Zantzinger. The electro- 
magnets used on this line weighed 185 pounds, and 
for some time after this Professor Morse believed 



that the wire used in winding them had to be of the 
same size as that on the line itself. The present 
fine-wired, compact, and portable electro-magnets, 
weighing less than a pound, and allowing a man to 
carry a telegraph office in his pocket, so to speak, 
were not dreamed of at that early day. This line 
was also opened with the primitive system of com- 
bined circuits, as first proposed by Professor Morse 
in obviating the difficulties arising from lost strength 
in the current on long distances. He speedily saw 
a better way to accompHsh this result, however, and 
in that same year began the experiments which in 
1 846 were crowned with success, and developed the 
short circuits and relays which made possible the 
great main lines and uninterrupted communication 
of to-day. In 1844 he also invented the "key" 
which is still in use. Without attempting the purely 
scientific and technical aspects of telegraphy, we 
will study at more length the practical and utihtarian 
application of it to the world of American business 
and every-day affairs. 

The experimental line opened from Washington 
to Baltimore with the $30,000 appropriated by 
Congress having proved practical, it was declared 
ready for public business on April i, 1845. Alfred 
Vail was the Washington operator, and Henry J. 
Rogers occupied a similar position at Baltimore. 
The tariff was one cent for four characters, and the 
first four days saw just one message transmitted. 
Thus did the American people welcome the facilities 
of the electric telegraph. About this time Profes- 
sor Morse offered his interest in the invention to 
the government for the ridiculously low price of 
$100,000. A brilliant Postmaster-General, how- 
ever, who saw no value in the invention, saved 
Morse the loss he was so willing to incur ; so other 
means had to be resorted to in bringing it before 
the pubHc. The proprietors of the patent at this 
time were Morse, Vail, L. D. Gale, and F. O. J. 
Smith.. The latter struck out alone, taking the New 
England States for his field, while the other three, 
having selected Amos Kendall, formerly Postmaster- 
General under President Jackson, as their agent, took 
the remainder of the country. Kendall devoted 
himself particularly to the South and Southwest, 
although it was early decided to have the first line 
run from Washington to New York. In carrying 
out this plan it was decided further that the first 
link should be constructed from New York to Phil- 
adelphia. The excitation of the public interest in 
the undertaking, and the consequent raising of cap- 
ital, were intrusted to Ezra Cornell and his brother- 
in-law, O. S. Wood, These two opened a small 

office on Broadway, where they set up their instru- 
ments; and having obtained with great difficulty 
permission to run a short wire over the neighboring 
roofs, they began exhibiting the telegraph. Interest 
was roused but slowly, however, and capital was 

The sum needed for the construction of the hue 
from New York to Philadelphia was $15,000, and 
it was only after the greatest difficulty, and the 
granting of two shares for every one paid for, that 
it was finally raised. There were about twenty-five 
subscribers, and to them was issued $30,000 in 
stock, while another $30,000 went to the patentees, 
making the total capital stock $60,000. The com- 
pany was organized under the name of the Magnetic 
Telegraph Company, and its Hne was completed 
from Philadelphia to Fort Lee on January 20, 1846. 
Th*e first New York office was at 16 Wall Street, 
and later it was moved to Post's Building, behind 
the Merchants' Exchange. The first clerk was 
Charles S. Bulkley, and messages had to be sent 
across the river by messengers, either for delivery or 
transmission. The attempt to cross the North River 
by cable failed in this year. Later a detour of 105 
miles, by which the line went up the Hudson and 
crossed on high masts at Anthony's Nose, proved a 
failure. Various attempts to lay a cable were made, 
but success was not achieved until February 12, 
1856, when S. C. Bishop, the New York manufac- 
turer, provided an armored cable insulated with 
gutta-percha. The Magnetic Telegraph Company 
formally organized on January 14, 1846, by the 
election of Amos Kendall, president; T. M. Clark, 
secretary ; A. Sidney Doane, treasurer ; and B. B. 
French, John J. Haley, John W. Norton, John O. 
Stems, William M. Swain, and J. R. Trimble, 
directors. The hne was extended to Baltimore, 
June 5, 1846, on an issue of $10,000 more stock, 
and later to Washington. Its cash receipts during 
the year 1846 amounted to $4,228.77. Six years 
later, even with the handicap of competing lines, its 
annual receipts amounted to $103,641.42, which 
indicates the increasing public favor shown to the 

In the decade that followed 1845 ^"^ ^^^ ^^^^ 
telegraph, companies started and wires ran over the 
country at an almost magical rate. Henry O'Reilly, 
one of the most energetic promoters and builders 
this continent ever produced, started westward, 
leaving his lines of wires behind to mark his course. 
From Philadelphia to Pittsburg he ran the Atlan- 
tic and Ohio Telegraph Company, capitaHzed at 
$300,000, and completed December 29, 1846. 

Thomas T. Eckert. 



From Pittsburg to Louisville he built, in 1847, ^^^ 
Pittsburg, Cincinnati, and Louisville Telegraph 
Company's line. It was over this wire that, in 1847, 
using a House machine, O'Reilly sent the first 
despatch ever transmitted by the printing system. 
Still further did O'Reilly go, notwithstanding the 
fact that a bitter legal battle was raging between 
himself and F. O. J. Smith for the Morse patentees, 
who claimed O'Reilly had infringed on their rights. 
From Louisville he boldly struck out for New 
Orleans via Nashville, and with a branch to Mem- 
phis. This line was incorporated as the People's 
Line, and was completed in 1 849 ; but it was unsuc- 
cessful from the start, and nearly ruined O'Reilly. 
It was later consolidated with the Ohio and New 
Orleans Telegraph Company; the two organized, 
January 6, i860, as the Southwestern Telegraph 
Com.pany, which was absorbed by the American 
prior to that company itself being taken in by the 
Western Union. Among the other early telegraph 
lines were the following : 



Date of 

New York and Boston Magnetic Telegraph Co . 
New York, Albany, and Buffalo Electro-MagneticCo. 

Lake Erie Telegraph Co 

New York State Printing Co. (House line) 

Ohio and Mississippi Telegraph Co 

St. Louis and New Orleans Telegraph Co 

New York State Telegraph Co. (Bain line) 

New York and New England Telegraph Co 

American Telegraph Co 

Illinois and Mississippi Telegraph Co 

Erie and Michigan Telegraph Co 

New York and Erie Telegraph Co 

Cleveland and Cincinnati Co 

Maine State Telegraph Co 

Vermont and Boston Telegraph Co 

New York and Washington Printing Telegraph Co. . 

North American Telegraph Co. (Bain Hne) 

Washington and New Orleans Telegraph Co 

Western Telegraph Co 

Ohio, Indiana, and Illinois Telegraph Co 

St. Louis and Missouri River Telegraph Co 

Northwestern Telegraph Co 

Western Union Telegraph Co 








These companies, with the branch lines repre- 
sented by them, comprised the bulk of the capital 
invested in the telegraph of the United States prior 
to 1855. The Magnetic Telegraph Company, as 
the oldest and for many years one of the most suc- 
cessful, was the first to perceive how essential uni- 
formity was to an economical and at the same time 
improved service. Under President William M. 
Swain this company made many advances and also 
many concessions to other companies to bring about 
this condition of affairs. To several of the Western 
and Southern lines it leased wires, thus allowing 
them to compete for through business. To give 

itself equal opportunities it leased the Washington 
and New Orleans lines in 1856, the Western Tele- 
graph Company's Hues, including the Marietta and 
Cincinnati branch, in 1858, and, under the Supreme 
Court decision upholding the Morse patent rights as 
against the Bain electro-chemical telegraph, it ab- 
sorbed the North American Company. 

The second great seaboard line and power for con- 
solidation was the American Telegraph Company, 
with the history of which the greatest telegraphic 
undertaking ever known — the transatlantic cable — 
is connected. In 1850 some thoughtful writer 
pointed out that St. Johns, Newfoundland, being 
the port for the speediest arrival of European steam- 
ships, ought to be the center for the telegraphs of 
America, in order that the earliest foreign news 
should be obtained. Acting on this hint, Mr. F. N. 
Gisborne in 1851 incorporated the Newfoundland 
Electric Telegraph Company. A short cable was 
brought from England, but the attempt to lay and 
operate it was unsuccessful. In 1854, Mr. Gisborne, 
having sunk all his property in the venture, came to 
New York seeking capital. He was introduced to 
Cyrus Field and laid the proposition before him. 
Field not only grasped the idea, but he carried it 
further — to its very end, in fact ; and then and there 
he determined that the transatlantic cable should be 
laid. He interested in the project his friends Peter 
Cooper, Marshall O. Roberts, Chandler White, and 
Moses Taylor, and on May 6, 1856, the New York, 
Newfoundland, and London Electric Telegraph 
Company was incorporated, with a capital of 
$1,500,000. Both this government and that of 
England made valuable concessions and grants to 
the company. 

In 1856 the cable to Newfoundland was success- 
fully laid, and October 31st of that same year the 
first transatlantic cable was ordered from Messrs. 
Newall & Company, and Glass, Elliott & Company, 
of London. This cable was composed of seven 
small twisted copper wires, surrounded by gutta- 
percha covered with tarred hemp, and inclosed in 
an iron armor of eighteen cords of small wire. 
During this year the U. S. S. Arctic and H. M. S. 
Cyclops took soundings along the proposed route for 
the cable. The United States and England each 
placed two vessels at the disposal of the company 
for the purpose of laying the cable. The United 
States ships were the Niagara, carrying one half the 
length of cable, and the Susquehanna, which acted 
as a tender. The English ships were the Agamenmon, 
having the other half of the cable, and her consort, 
the Leopard, acting as a tender. The shore end of 



the great cable was landed from the Niagara at 
Ballycarberry Strand, in Valentia Bay, Ireland, 
August 5, 1857, and two days later the fleet started 
slowly away for the distant shores of Newfoundland. 
The first three days all went well; but on the nth, 
late at night, there was a sudden jar and shock, and 
the cable was found to be broken. Three hundred 
and eighty miles of it had been laid. The fleet 
returned to England, and the remainder of the cable 
was stored at Keyham docks for the winter. More 
cable was provided, and on the loth of June the 
succeeding summer the same little fleet left Plym- 
outh, this time for mid-ocean, it having been deter- 
mined to start both ships, paying out simultane- 
ously. This plan was tried, and twice the cable 
parted before more than a short distance had been 
traversed. The third time 142 miles were paid out 
before a break finally occurred. This time the ves- 
sels failed to meet each other, and so returned to 
Plymouth. Having thus got together again, a last 
attempt was determined upon, and on July 29th it 
was made and was successful. Almost simultane- 
ously the two vessels reached the shore and landed 
the cable, on the afternoon of August 5th, the 
Niagara at Trinity Bay, Newfoundland, and the 
Agamemnon at Valentia Bay, on the Irish coast. 
Two thousand and thirty-six miles of cable had been 
laid, and on August i6th the first message was 
flashed under the ocean, from the Queen to the 
President of the United States. From the first this 
cable suffered from defective insulation, and amid 
world-wide grief it finally gave out, September ist, 
after having grown steadily weaker from the moment 
it was first tested. 

The connection of this the first transatlantic cable 
with the inception of the American Telegraph Com- 
pany may not at first be seen ; but it is direct, 
nevertheless, and to one who knew the late Cyrus 
Field and his character, it should be clear. Mr. 
Field from the first believed fully in his cable pro- 
ject, and, so believing, he was far-sighted enough to 
recognize the importance of a system of land tele- 
graphs connecting the cable with the great centers. 
For this reason, when David E. Hughes, who had 
just invented an excellent printing-telegraph, was 
introduced to Mr. Field's notice, that gentleman 
was easily induced to purchase the idea, and despite 
the fact that the transatlantic cable was still high 
and dry ashore, he secured the incorporation of the 
Boston and New York Printing-Telegraph Company. 
Besides this company others were organized at this 
time, notably the East and West and the Troy and 
Boston. The Commercial Printing-Telegraph Com- 

pany gradually replaced these, and when the Amer- 
ican Telegraph was incorporated. May 30, 1858, 
with $200,000 capital, it had no difficulty in leasing 
this latter, together with other Eastern lines, such 
as the Maine State Telegraph Company. The ex- 
tension of the American Telegraph Company from 
this time was rapid, and in 1865, when the Great 
Eastern made the third, and unfortunately fruitless, 
attempt to lay a cable, this company controlled 
nearly every line on the seaboard east of the Hud- 
son. On July I, 1866, its $4,000,000 capitalization 
being replaced by an issue of $12,000,000 of West- 
ern Union stock, the American was quietly absorbed 
into that company. 

Scarcely a month and a half later, on August 
1 6th, the Anglo-American Telegraph Company, the 
successor of the various other cable companies, suc- 
ceeded in laying a cable from the Great Eastern 
which has worked ever since. The failure of the 
attempt made by the same ship the previous year 
was also mitigated shortly after this by the suppos- 
edly lost cable being found, grappled, brought up, 
spliced, and successfully laid. 

These momentous events in the story of trans- 
oceanic telegraphy were being duplicated on land, 
however. Five years before the cable of 1866 was 
even wet by salt water a transcontinental telegraph 
line was flashing the stirring news of that warlike 
time from Washington to San Francisco. Hiram 
Sibley is the man to whom much of the credit for 
the accomplishment of this great feat is due. So 
long before as 1857 he had become possessed by 
the idea of the feasibility of this undertaking, and 
had proposed it to the directors of the Western 
Union Company. They were conservative, and a 
transcontinental telegraph was no light thing in those 
days. Nothing discouraged, Mr. Sibley laid his idea 
before Congress, and obtained from that body in 
i860 not only indorsement, but liberal concessions 
as well. Armed with these, Mr. Sibley secured the 
cooperation of the Western Union, and the Pacific 
Telegraph Company was organized. The California 
State Telegraph Company, learning of the plan, 
agreed to take a share in it, and a company was 
organized there to build the line as far as Salt Lake 
City, which was to be the Western end of the East- 
ern constructors. Everything seemed propitious, and 
work was begun. 

The public fully expected that two years was the 
minimum time in which the line could be completed, 
and many well-informed people beheved it would 
take longer. The surprise of the country can be 
imagined, therefore, when just four months and 



eleven days from the time work was commenced the 
Hnes met and were joined at Salt Lake City, and 
the first through message sent. This was November 
15, 1 86 1. Since then the telegraph across, around, 
lengthwise, or breadthwise of the land has stretched 
its threads of steel. The blank refusal with which 
the New Jersey Transportation Company met the 
request of grim old Amos Kendall to run the first 
wires of the Magnetic Telegraph Company along 
their roadway was modified a year or two later, 
when the Baltimore and Ohio Railroad granted the 
first of such permissions ; and to-day the railroad 
and the telegraph are seen to be inseparable. The 
insignificant sum — less than $5,000 — which repre- 
sented the first year's receipts of the old Magnetic 
Company has grown to dimensions where even mil- 
hons have to be reckoned in hundreds. 

Prior to 1866, the year that saw the transconti- 
nental line opened, the many companies and small 
Hnes divided the business of the country into so 
many channels that the totals are not obtainable. 
The advance of system and uniformity through 
consolidation brought comparative order out of this 
confusion, and in 1866 figures were made up giving 
the total wire mileage of the American telegraphs as 
75,686, covering an actual line distance of 37,380 

mated for the country at large. There were 22,909 
people employed in the telegraph business by all the 

In the year ending June 30, 1895, the figures for 
the Western Union Company had reached dimen- 
sions scarcely conceivable as the result of a single 
half-century's improvement. From a total wire 
mileage in 1883 of 462,283, it had increased nearly 
100 per cent., the total in 1895 being 802,651 miles. 
These wires represented a line length of poles and 
cables of 189,714 miles, joining in one complete and 
organized system of communication 21,360 offices. 
The number of messages transmitted during the year 
was 58,307,315, or forty per cent, more than in 
1883. The expenses of the company in transacting 
this business were $16,076,629, leaving a profit of 
$6,141,389. This return for one year's business is a 
wonderful contrast to that modest little sheet which 
set forth the first annual balance of the old Magnetic 
Telegraph Company. The gradual advance by 
which this tremendous volume of business has been 
rendered possible is best shown in the following 
table, giving the mileage of lines operated, number 
of offices, number of messages sent, receipts, ex- 
penses, profits, and average tolls and cost per mes- 
sage, for selected years since 1866. 


Miles of 

Miles of 




Poles and 






Tolls per 

Cost to Co. 



OF Message. 
































1885 .... 




















1895 ... 










miles. There were 2250 telegraph offices open. By 
1870 the figures had increased to 112,191 miles of 
wire, 54,109 miles of hne, and 3972 offices, which were 
doing a business annually of 9,157,646 messages. 
The year 1880 found an equally marked gain. There 
were 253,534 miles of wire, 85,645 miles of line, and 
9077 offices, while the number of messages annually 
transmitted had increased to 29,216,509. Six years 
later and the growth was astounding in its rapidity : 
217 telegraph companies existed throughout the 
country, 20,899 offices were ready to receive or 
transmit messages, and 671,002 miles of wire, cov- 
ering 226,308 miles of line, were at the service of 
the operators. Of this great total the Western 
Union Company was the chief quantity; 462,283 
miles of its wires were included in the 671,002 esti- 

The aggregate assets of this company are $125,- 
966,171, and the capital stock outstanding is $95,- 
370,000, of which ,$550,000 was added during the 
last year for the purchase of the lines and property 
of the American Rapid Telegraph Company. 

To these statistics, in estimating the whole im- 
portance of the telegraph in the United States, 
must be added the business done by the Postal Tele- 
graph-Cable Company, and a few small telegraph 
systems in various parts of the country. I have at 
hand no particulars of the amount of that business, 
but it would, perhaps, be fair to say that the total 
telegraph receipts in the United States for the year 
1895 amounted to about $25,000,000. 

The important part played by the telegraph in the 
development of the world's commerce is so self- 


evident as to need little demonstration. Facilities These figures, significant though they are, still fail 
for rapid transit such as we have to-day both on to show the greatest benefit accruing from the tele- 
land and water would of themselves have accom- graph. This is in the money it saves. Every cause 
plished much, it is true, but they would suffer a serious and every happening that affect the community, its 
diminution of their usefulness were the vastly more business, its crops, its affairs, are instantly communi- 
rapid transmission of intelligence impossible. A cated to the farthest comer of the earth. Nothing 
grain broker in Chicago who had only the railroads need come as a surprise. The distant dealer is as 
and the Atlantic liners as carriers for his queries well posted as the trader on the ground, and he oper- 
and the return information would be obliged to ates accordingly, with an intelligence that saves mil- 
wait two weeks at the very least before he could lions every month. All this is in addition to the 
hear from London. Business methods to-day pro- advantages obtained in social and family life through 
hibit such delays. The buyer in California must it, as well as in those occupations which are not 
have instant communication with his New York primarily commercial. 

house, which in turn must be equally well aware of Twenty-five billion dollars are to-day represented 
what its foreign agents are doing. The telegraph by the internal commerce of this great nation; 
and the cable permit this. In 1840 the total exports $1,500,000,000 more are included in our trade with 
and imports of the United States amounted to but foreign lands ; a merchant marine with a carrying ca- 
$221,927,638. The year the first telegraph line pacity of 3,261,982 tons now flies our flag; railways 
was built, and a year later, showed the totals even with a mileage of nearly 180,000, or one half the total 
less, $219,224,433 being their estimated amount, mileage of the world, gridiron our continent ; and a 
Since then, while each decade has seen improvement population more prosperous and more enterprising 
except the one which included the disastrous Civil than that of any other country or time is pushing 
War, the subjoined summary, will show the added steadily onward. All these have come to fruition 
impetus given to commercial enterprise, first in the since the birth of the telegraph. With their advent 
decade between 1845 and 1855, when the telegraph and growth that of the great telegraph system of 
lines of the country sprang into prominence, and the United States is inseparably linked by the inter- 
secondly in the period between 1865 and 1875, when dependence of a common cause and effect. Each 
the transatlantic cable became of every-day use. has rendered the other possible. The end, however, 

is far from being reached; and when the wonders 

EXPORTS AND IMPORTS, 1845 to 1895. ... t, f . 1. , j -j 

which one short century has worked are consid- 

"^"A"- Tnd ''imports.^ ered, the futility of setting limits to the progress of 

^^45 $219,224433 the future is but too apparent. The movement is 

i8s5 476,718,211 „ . , , , ., . 

1865 404,774,883 a^ll in advance, and daily improvements testify to 

^oP 1,046448,147 its earnestness ; but its ultimate results I must leave 

>88s 1,319,717,084 ' 

1894 1,547,135,194 to others the chronicle. 



THE word " telephone " in its original use was 
not applied to the transmission of speech by 
the use of the electric current. The word is 
much older than the art to which it is now exclu- 
sively applied. To an exhibition of the transmission 
of musical vibrations through solids, given by Wheat- 
stone as early as 1821, he gave the name of "tele- 
phone concerts," and certain kinds of trumpets for 
signaling, used as early as 1845, were called tele- 
phones. Indeed, the name was at one time applied 
by the Germans to the common speaking-tube. 

The effort to transmit sounds, and especially musi- 
cal sounds, suggested the possibility, and perhaps 
encouraged the hope, of the transmission of articu- 
late speech beyond the Hmits to which it may be 
transmitted through the natural medium of its 
propagation, the air ; but the hope was not realized 
until the invention of Bell, described in his patent 
of March 7, 1876. In that patent were described 
and claimed a method of, and apparatus for, trans- 
mitting sound by means of an undulatory current 
of electricity. " This invention solved the problem, 
long labored upon by inventors and scientific men, 
of the transmission of human speech by the use of 
the electric current, and laid the foundation of the 
art of speaking-telephony, since widely introduced 
throughout the world." 

In 1836, Dr. Charles G. Page, of Salem, Mass., 
an examiner in the Patent Office and an electrical 
inventor of note, while employing a rapidly inter- 
rupted electrical current produced by the ordinary 
vibrating spring-tongue circuit-breaker, found that 
if this intermittent current was passed through the 
coils of an electromagnet the latter gave forth a 
musical note the pitch of which corresponded to the 
rapidity of the interruptions; the law of acoustics 
being that after air-vibrations have become rapid 
enough to blend together as a continuous musical 
sound, an increase in their number per second raises 
the pitch of the sound. He published this discovery 

under the name of " Galvanic Music." Although 
not utilized in the speaking-telephone, this served to 
attract the attention of many experimenters to the 
electrical production of sound. 

In 1854, Charles Bourseul, of the French tele- 
graphic service, suggested that the circuit-breaking 
tongue or plate might perhaps be vibrated by the 
air-waves produced by the voice of a speaker. 
Would the resulting sound at the distant receiver be 
articulation? He inclined to doubt it; but he said 
that our knowledge of the precise nature of articulate 
sound was too meager to enable us to answer that 
question a priori, and the subject was worth experi- 
ment. In the same year, " Didaskalia," a periodical 
of Frankfort-on-the-Main, published an abstract of 
Bourseul's article, and Philip Reis, a schoolmaster 
who lived at Frankfort-on-the-Main, then took up 
the subject. For his circuit-breaking transmitter he 
used the membrane diaphragm of the old lover's 
telegraph or string-telephone, so mounted as to make 
and break the circuit once at each vibration. For 
his receiver he employed Dr. Page's singing-magnet. 
He hoped to transmit speech, and his efforts at- 
tracted much attention. But he found that musical 
sounds or confused noises were all that came from 
his receiver, and in 1863, having perfected his in- 
strument, he put it on the market as a musical 

Reis's discoveries contributed nothing toward the 
speaking-telephone, unless it be the suggestion that 
the diaphragm of the lover's telegraph might be em- 
ployed as a part of an electrical apparatus. Reis 
attracted attention to the subject, however, though, 
on the other hand, the failure of both Bourseul and 
himself after ten years of experiment must have been 
very discouraging to others. In 1862 Helmholtz 
published his great work on sound. In this he 
showed, by direct experimental proof, that each 
articulate sound was a composite, made up of a 
fundamental or principal tone which gave volume 





and pitch to the whole, while the peculiar character, 
or, as it is technically called, " quality " or " form," 
which distinguishes one articulate sound and its air- 
vibrations from another, is due to the admixture of 
a considerable number of much feebler tones, called 
" overtones," of successively higher and higher pitch. 

These materials — namely, the discovery by Helm- 
holtz of what articulation is, and the proof by the 
experience of Reis that the only plan thought of for 
its transmission was a failure — were needed for the 
creation of the speaking-telephone. But they had 
been widely known for a dozen years without lead- 
ing to that invention, when Alexander Graham Bell, 
son of an Edinburgh professor of articulation, and 
himself a teacher in Boston of articulation to deaf- 
mutes, brought them to bear with success on this 
problem. In his patent of March 7, 1876, Mr. Bell 
stated the well-known fact that an intermittent cur- 
rent, such as would be produced by a circuit-breaker, 
would reproduce musical pitch. Then he showed 
that a current which, instead of being interrupted, 
was caused to vary as sound-waves vary, could 
transmit and reproduce every kind of sound which 
sound-waves could convey, including vocal sounds 
and the utterances of the human voice. He defined 
this current as a current consisting of " electrical un- 
dulations, similar in form to the vibrations of the air 
accompanying said vocal or other sounds," whence 
it took the short name " undulatory current." 

An early and noteworthy public exhibition of 
Bell's telephone was made shortly after the granting 
of the patent, before the judges at the Centennial 
Exhibition. One of these judges, a man of the 
highest scientific repute. Sir William Thomson, now 
Lord Kelvin, speaking to a fellow-scientist on 
the evening of that day, said of Professor Bell's 
invention, " What yesterday I should have declared 
impossible I have to-day seen reaUzed." And 
later, addressing the British Association, after de- 
scribing the telephone, he said, " Who can but 
admire the hardihood of invention which devised 
such very slight means to realize the mathematical 
conception that, if electricity is to convey all the 
delicacies of quality which distinguish articulate 
speech, the strength of the current must vary con- 
tinuously, and, as nearly as may be, in simple pro- 
portion to the velocity of a particle of air engaged 
in constituting the sound?" 

Bell's improved instrument, which was put into 
commercial use early in 1877, still remains the most 
perfect articulator in the world. But as all the 
electricity employed in it is such as the mere force 
of the voice itself generates,— the current so pro- 

duced is usually reckoned as not over ^ p ^ o ^ ^ part 
of that employed on an ordinary telegraph line, — its 
sounds are feeble, its effects easily drowned out by 
disturbances, and the instrument is therefore not 
well fitted for ordinary commercial use as a trans- 
mitting-telephone, where the listener is in a noisy 
place, and the earth below and a network of neigh- 
boring wires are full of other and more powerful 

On April 14, 1877, Mr. Emile Berliner filed in 
the Patent Office a caveat, and on July 20, 1877, 
Mr. Edison filed an application, each of which de- 
scribed what we now know as the speaking-micro- 
phone. In this instrument the voice, acting to vary 
the pressure between two electrodes in contact with 
each other, molds the flow of electricity from a 
battery into Bell's undulatory, speech-bearing cur- 
rent. The microphone of Berliner, with the addi- 
tion of carbon contacts, the value of which, as dis- 
tinguished from metal contacts, was first discovered 
by Edison, has become the universal transmitter of 
the world. These inventions have been chiefly used 
in the United States in the form of the Blake trans- 
mitter, an instrument of beautiful organization and 
construction, devised in the summer of 1878 by 
Mr. Francis Blake, then, or not long before, in 
charge of the electrical determination of longitudes 
for the government. The receiving-telephone, made 
by Mr. Bell in 1877, still remains the preferred in- 
strument for that piu-pose. 

The telephone was natvurally first used over a sin- 
gle wire connecting two stations ; but the possibility 
of a wider use was immediately perceived, wherein 
a number of such wires, practically unlimited, should 
be so connected together that a person at any station 
of such a system could hold conversation with per- 
sons at any other station, and the " exchange " arose. 
The exchange was, naturally, at first confined, or sub- 
stantially confined, to the municipal limits of single 
cities or towns. It spread rapidly, until in 1884 
there was an exchange in every town or city of 
10,000 inhabitants or over in the United States, 
and of course in many towns of smaller population. 
The connection of neighboring exchanges with one 
another by trunk-lines, whereby the subscribers in 
either exchange could talk with the subscribers in 
any other exchange of the group, naturally followed, 
and this in an ever-widening circle, until in 1892 it 
had become possible for the subscribers to the ex- 
changes in the city of New York to talk with the 
subscribers to the exchanges in Chicago, and a little 
later the system of exchanges in New England was 
connected with New York, and thence to Chicago. 

John E, Hudson. 



The line from New York to Chicago was formally 
opened to the public on the i8th of October, 1892. 
The connecting of these cities, and the furnishing of 
apparatus for personal conversation between them, 
was such an addition to the facilities of business as, 
by a sort of common consent, to be recognized as a 
matter of public concern, and the formal opening 
was made by a conversation between the mayors of 
the respective cities. 

As exchanges have grown and lines have been 
extended, new questions have suggested them- 
selves and new difficulties have arisen. At the out- 
set, and for a considerable time thereafter, one wire 
only extended from the central office to the premises 
of each subscriber, the ground being used to com- 
plete the electrical circuit, as in telegraphy. But 
this opened the door to an amount of interference 
from other currents, — the earth-currents, so called, 
and currents like those from electric cars, discharged 
into the earth, — which, owing to the extreme delicacy 
and sensitiveness of the telephone, seriously impaired 
the service, and often rendered conversation impos- 
sible. This difficulty has been overcome by the use 
of metallic circuits; that is, by using two wires to 
connect the central office with each subscriber's prem- 
ises, and ceasing to use the ground as a "return." 
It was found, however, especially in the longer 
lines, that when a number of wires were strung on 
the same poles, or when such wires were paralleled 
by wires carrying electric light or power currents, 
there were produced — by a subtle sympathetic effect 
called induction — certain disturbances which con- 
fused the speech and often rendered it unintelligible. 

This was overcome by changing the relative posi- 
tion of the wires in different parts of the line. As 
has been explained, each circuit consists of two 
wires. On each line of poles are a number of cir- 
cuits. At certain measured distances, determined in 
accordance with rules deduced from theory and 
from experiment, each wire crosses over and changes 
places with the others. The plan is that just as 
much as one line influences another to generate 
these counter-currents on one part of the route, just 
so much shall another part of the same line influence 
another part of that same other line to generate 
counter-currents, but in a different direction, so that 
these " induced " currents shall exactly neutralize 
and destroy one another. If one will endeavor to 
think out how, in a long Hne of fifty or a hundred 
wires (for some of the larger routes carry that 
greater number on the poles), each wire can at fre- 
quent intervals be so transposed that each line shall 
thus, by balancing, protect every other one, and 

shall be itself protected from every other, some idea 
of the difficulty of hitting upon a perfect plan will 
be realized. When wires are made up into cables 
the same result is obtained by twisting each pair of 
wires together, and then " laying up " these twisted 
pairs according to a rule which has been carefully 
studied out to accomplish the desired result. 

There was still another difficulty, experienced on 
long lines especially. The telephone transmitter 
produces in that part of the line where it is situated 
Bell's speech-carrying variations of current. These 
consist of alternate increases and decreases of cur- 
rent exactly corresponding to the ever- varying sound- 
waves; and when these act upon the receiver the 
spoken word is reproduced. These changes, neces- 
sary for articulation, corresponding to what are called 
overtones, succeed one another, in telephony, at the 
rate of, say, 2000 to the second. Now it is found 
in a long line that this change of electrical con- 
dition takes place at the distant end with a cer- 
tain sluggishness, so that before there has been time 
for an increase to fully manifest itself there, the suc- 
ceeding diminution comes along. Thus the rise and 
fall of current at the end of a long line becomes so 
insufficient or so inaccurate that the spoken words 
are not clearly heard. This difficulty, which is due 
in part to other causes, is known as " retardation." 
In underground lines, as formerly constructed, the 
difficulties from both induction and retardation are 
increased from fifty to one hundred fold for equal 
distances. To meet the trouble from retardation 
the character of the lines must be changed, and 
this has been done. 

What the change should be was by no means a 
simple matter to determine. Diminishing the sur- 
face area of the wire per unit of length lessened the 
evil of retardation, other things being equal. But 
when a smaller wire was used other things did not 
remain equal, because the smaller wire would not 
carry as much electricity per unit of time, and this 
aggravated the trouble. Proximity of the wires of 
one circuit to other wires increases the evil ; close 
proximity of the wires to the earth enormously in- 
creases it. Wrapping the wires with any of the 
usual insulating coverings increases it. But the 
wires cannot be far apart on pole lines, and in a 
cable the wires must be embedded in an insulator, 
must be packed closely together, and must be laid 
under water or underground. The capacity of iron 
to become magnetized also unfitted it for use in 
telephony. Balancing all these evils, advantages, 
and necessities, the plan adopted has been to em- 
ploy metallic circuits, — that is, two wires for each 



set of instruments, — to use copper as the material, 
and to take very large wire for aerial or overhead pole 
lines, but, on the other hand, decidedly small wire 
for cables. The size of the wire for overhead lines 
varies with the length of the line. Thus, while the 
copper wire used between New York and Boston 
weighs 172 pounds to the mile, wire weighing 435 
pounds to the mile is used between New York 
and Chicago, so that each of the several metallic 
circuits uniting Boston with Chicago contains more 
than a million pounds of copper. 

As wires have multiplied there has been a strong 
public demand that they should go underground, at 
least in the more thickly settled portions of the larger 
cities. A beginning on underground work was made 
in 1884. On the ist of January, 1885, there were 
1225 miles of wire underground, and on the ist of 
January, 1895, 149,592 miles of underground wire, 
in some sixty cities. As already stated, the diffi- 
culties experienced from retardation and induction 
are greatly increased in underground work, and 
hence the length of buried conductor that can be 
used is limited. 

Experience having made manifest the difficulties 
which have been detailed, and the remedies having 
been learned, they were at once applied. But before 
they were learned much work had been done, and to 
bring this up to the proper standard a very general 
rebuilding was entered upon, not only of lines, which 
had to be changed from iron to copper and con- 
verted into metallic circuits, but also of switchboards 
and other apparatus. 

As there has been improvement of lines, there has 
also been a steady improvement of apparatus, and 
the result is that it is now possible from any properly 
appointed station to talk north and east to Augusta, 
Me., north to Concord, N. H., Buffalo, and Mil- 
waukee, west to Chicago, and south to Washington, 
Cincinnati, Nashville, and Memphis ; and of course 
to the principal cities intermediate. This system of 
telephonic intercommunication is by far the most ex- 
tensive in the world. It may be interesting to note 
that within that territory live and do business some- 
thing more than one half of the whole population 
of the United States, so that it is hardly a figure of 
speech to say that one half the people of the country 
are within talking distance of one another. 

The development and present extent of the tele- 
phone business are clearly shown by an examination 

of its statistics. On January i, 1881, there were in 
use in the United States, for telephone purposes, 
29,714 miles of wire. Ten years later, January i, 
1 89 1, the wire mileage had reached 331,642; and 
on January ist of the present year it had grown to 
577,231. During the current year there has been a 
further increase, bringing the total above 600,000 

It will be remembered that the electric speaking- 
telephone became known in the spring of 1876. 
On December 20, 1877, 5187 had gone into use in 
the United States. Ten years later the number had 
increased to 380,277. The number in use October 
20, 1895, was, approximately, 660,817. 

On January i, 1881, the total number of exchange 
subscribers was 47,880. On the same date in 1891 
this number had grown to 202,931, and on January 
ist of the present year it had still further increased 
to 243,432. 

Statistics as to the number of connections or 
conversations by telephone between exchange sub- 
scribers date back to 1884 only. During 1884 it 
was 215,280,000, the yearly rate being based on 
daily use. January i, 1895, the estimated number 
of exchange connections daily in the United States, 
made up from actual count in most of the ex- 
changes, was 2,088,152, or at the rate of about 
670,000,000 per annum. Not only has there been 
an increase in the number of subscribers to the 
telephone, but there has also been a steady increase 
in the average daily use by each subscriber. The 
average number of calls per subscriber per day 
was, in 1885, five and one half; in 1895, eight 
and one half. 

With these statistics it will be interesting to com- 
pare the statistics of the larger features of the busi- 
ness as it has been established in the principal foreign 
countries. There are in the United States about 
250,000 subscribers. The British Isles, with more 
than half our population, have less than 75,000. 
France, with a population of 38,000,000, has but 
25,000 subscribers, or about as many as New York 
and Boston combined. Germany makes a better 
showing, having 90,000 subscribers in a population 
of 50,000,000 ; but this is less than one half the num- 
ber she should have to bring her up to our standard. 
Austro-Hungary, with 40,000,000 people, has but 
20,000 subscribers; and Russia, with over 108,000,- 
000 inhabitants, only 9000. 

^^^-^«fg: %^, 




THE familiar picture of the old-fashioned 
stage-coach and horses standing in front of 
an ancient tavern, ready to transport pas- 
sengers and merchandise to some distant place, 
with the driver perched high on the first seat, and 
seemingly conscious of his individual prominence as 
the conductor of a very essential method of convey- 
ance, quite clearly brings to view the manner in 
which the general intercourse of this country was 
chiefly transacted during its early years ; and it par- 
ticularly suggests, through the personality of the 
driver, the means by which small parcels were sent, 
and the various errands or commissions he performed, 
for they were then customarily intrusted to that 
channel of communication between locahties. The 
vessels then engaged in the carrying trade along the 
coast and on the lakes, rivers, and canals likewise 
afforded a further method of transportation between 
districts which were more readily accessible by water 
than by land, and to the masters of such vessels 
were confided duties similar to those required of the 
stage drivers. 

Such methods sufficed until there came into oper- 
ation a series of railways, which, with their greater 
speed and convenience, necessarily displaced the 
stage-coach lines ; and the obligations theretofore 
assumed by the stage drivers were naturally trans- 
ferred to the conductors of the railway trains. 
Many of those conductors had been stage drivers, 
and they were employed by the railways because of 
their general acquaintance with the people, and their 
familiarity with traffic between the cities and towns. 
The advent of the railways had given an unusual 
impetus to the commercial relations of the country, 
so that, on the opening of a through route by water 
and rail from New York to Boston, the merchants, 
bankers, or others who wished to send small parcels 
enlisted the services of not alone the railway and 
steamboat employees, but the assistance of their 
friends traveling between those cities ; for New 

York and Boston were then two of the most impor- 
tant places in the country, their interchange of busi- 
ness was large, and no opportunity was neglected to 
secure its prompt transaction. The general demand 
thus made upon the time of the railway and steam- 
boat employees ultimately necessitated a division of 
their labors ; and eventually they were required to 
make a choice between acting as agents of the pub- 
lic or as servants of their respective companies. 

One of the earliest railways to enforce this distinc- 
tion was the Boston and Worcester Railway, of 
Massachusetts. That road had in its service a con- 
ductor by the name of William F. Harnden, who 
was one among the many conductors employed by 
it and the public as agents in the transaction of their 
various interests. Harnden thought best to sever 
his relations with the railway, came to New York in 
1838, and met James W. Hale, then proprietor of 
a reading-room in Wall Street, which was largely at- 
tended by merchants and travelers. With him Harn- 
den discussed the advisabihty of separating from 
the general railway traffic the business of carrying 
parcels and fulfiUing orders, and converting it into 
an individual enterprise. Harnden's previous expe- 
rience in a similar respect enabled him to perceive a 
fair opening for his own benefit and for that of the 
public in the establishment of an independent ser- 
vice between New York and Boston ; and, with the 
encouragement of Hale, the express business, as 
now conducted, then and there had its conception. 

Acting on that determination, Harnden promptly 
effected arrangements with the railroad and steam- 
boat companies forming the through line via Provi- 
dence, and on February 23, 1839, published adver- 
tisements in the New York and Boston newspapers 
announcing that on March 4th ensuing he would 
begin personally to conduct an " express " service 
between the two cities, which service would embrace 
the purchasing of goods, collection of drafts, notes, 
and bills, and the carriage of small parcels. The 




trip was made from Boston to New York as out- 
lined, and was then followed by a regular service 
three or four times a week. 

Thus the first express, actually known by that 
name, had its birth. And here it should be stated 
that, although Harnden was first to start an express 
between Boston and New York, there were at the 
same time others engaged in a similar occupation 
throughout New England, having been attracted to 
that new field of industry by the opening and ex- 
tension of railway lines. Among those who then 
embarked in the business was Alvin Adams, who 
came from Vermont to Boston early in 1840, and 
shortly afterward determined upon the introduction 
of a route between Boston and New York, via the 
Norwich line. Adams duly advertised his purpose, 
and on May 4th in that year began the express which, 
under his name, has since become so widely known. 

In a short time the express routes between New 
York and Boston had attracted considerable atten- 
tion, their facilities were regularly utilized by the 
general public, including the financial institutions of 
both cities, and the transportation companies cheer- 
fully assisted in their operations, for the enterprise 
had relieved their employees of extra labor, and 
materially added to their revenues, besides taking 
from them a large amount of responsibility. The 
readiness with which the services offered by Harn- 
den and Adams had been accepted, and the confi- 
dence displayed in intrusting to them valuable 
packages and large sums of money for transmission, 
are particularly noteworthy facts, as those men at 
the inauguration of the business were almost un- 
known in mercantile affairs. It was evident they 
had no financial resources with which to meet losses 
to property in their care, and their only stock in 
trade consisted of the special privileges which each 
had obtained from the railroad and steamboat com- 
panies for the transaction of their business ; but they 
soon earned a reputation for efficiency and integrity 
that was aptly described in the proverbial phrase, 
" with the promptness and fidelity of an expressman." 

The success of those lines naturally led to the 
formation of others, and from 1840 to 1845 express 
routes were opened from New York to Albany, 
Philadelphia, Baltimore, Washington, Buffalo, Pitts- 
burg, Detroit, Chicago, Cincinnati, Louisville, St. 
Louis, and New Orleans, connected with which were 
such other expressmen as William B. Dinsmore, 
Henry Wells, Edwards S. Sanford, Samuel M. Shoe- 
maker, Johnston Livingston, and William G. Fargo. 

At that time there were few railroads in the East, 
and none beyond Pittsburg ; and transportation be- 

tween prominent localities in the West was almost 
wholly conducted over the great waterways of the 
Ohio, Mississippi, and Missouri rivers, with their 
tributaries, which included canals then recently 
completed in several of the States to connect those 
rivers with the lakes. These formed the most 
frequently traveled routes of communication between 
the West and the East, and the express was duly 
established thereon. Within the next few years rail- 
road lines were rapidly constructed throughout the 
country, and by them the express was likewise car- 
ried, so that its scope was thus steadily enlarged in 
all directions. The great trunk-lines which now 
cover the United States had not then been projected, 
and such railroads as were at that time in operation 
consisted of local and independent routes, widely 
scattered, and without connection except that which 
might be had by steamboat or stage. The express- 
men, observing the necessity for through and contin- 
uous facilities from point to point, however distant, 
arranged to give the public that very essential ser- 
vice ; and in bridging these intervals they for a time 
called themselves " forwarders," in analogy to the 
forwarding business as theretofore conducted, and 
which had been the receipt and delivery of merchan- 
dise between two carriers not otherwise connected. 

The important manufacturing interests, as well as 
the largest firms, principally located in the Eastern 
and Middle States, were during this period forward- 
ing supplies for the country in general by railroad 
freight and by vessel — such supplies being most 
frequently sent to large cities, particularly in the 
South and West, for further distribution ; but with 
the inauguration by the express of continuous lines, 
those shipments were made directly from point to 
point, so that the outlying sections of the country, 
which had not theretofore had any considerable 
business relations with the important cities, were 
brought into close touch with them. In then 
endeavoring to increase its business the express 
naturally became not only solicitor, purchasing 
agent, and forwarder, but was, in a degree, respon- 
sible for any commercial credit that might thus be 
extended through its influences. The express also 
undertook the carriage of letters; and the public, 
quick to appreciate such service, very promptly 
availed of it in preference to that of the mail ; but 
the venture met with opposition on the part of the 
government, and was ultimately abandoned. 

Soon after the discovery of gold in California in 
1848, when great numbers of people went there to 
assist in developing the resources of that region, — in 
which the whole country was interested, — the express 

Levi C. Weir. 



readily anticipated their necessities for prompt and 
reliable commercial intercourse with the East by- 
opening agencies in San Francisco, and at the vari- 
ous mining camps on the Pacific coast, for the trans- 
mission of packages, money, and gold-dust, and for 
the transaction of a banking business. 

For several years just previous to 1854, the tend- 
ency of the principal expresses had been toward 
consolidation of interests, as it was beheved that 
much better, more prompt, and less expensive service 
could be rendered by such association. Accord- 
ingly, in that year, through the efforts of Adams, 
Dinsmore, Sanford, and others, the routes of Harn- 
den's Express, the lines of several minor concerns in 
the Eastern States, and those on the steamers run- 
ning from New York to Charleston, Savannah, 
Mobile, and New Orleans were combined with the 
express of Adams & Company, under the title of 
the Adams Express Company. Alvin Adams be- 
came president, William B. Dinsmore vice-president, 
and a board of directors was formed, of which 
Edwards S. Sanford, Samuel M. Shoemaker, Johns- 
ton Livingston, and others were members. In this 
year, also. Wells, Livingston, Fargo, and Butterfield, 
through a similar incorporation of lines extending 
from the East, via Albany, Buffalo, and the lakes, 
to the far West, organized the American Express 
Company, with Henry Wells as president, John 
Butterfield vice-president, William G. Fargo secre- 
tary, Johnston Livingston and Alexander Holland 
directors, and Daniel Butterfield, James C. Fargo, 
and Charles Fargo superintendents. Likewise in 
1854 the United States Express Company was 
formed by Kip, Barney, and Marsh, to operate an 
express over the then recently completed line of the 
New York and Erie Railway, and other routes 
extending farther into the West. D. N. Barney 
was made president, H. Kip became superintendent, 
and T. B. Marsh tre§,surer. About that time, also. 
Wells, Livingston, Fargo, Barney, and others intro- 
duced another express on the Pacific coast, under 
the title of Wells, Fargo & Company, to form a 
through connection, both overland and by water, 
with the East. During the next few years several 
expresses operated stage lines, and the famous 
" Pony Express," between St. Louis and San Fran- 
cisco, Wells, Fargo & Company, however, being the 
most prominent among them ; and in 1858 that con- 
cern, through an association with such lines, formed 
the Overland Mail Company, which until the comple- 
tion of the Union Pacific Railroad exclusively carried 
the United States mails between the Missouri River 
and the Pacific coast. In 1855, under the title of the 

National Express Company, there were organized 
several express routes which had been operated be- 
tween New York, Albany, Troy, Saratoga, White- 
hall, Rutland, and Montreal. D. N. Barney was 
made president, J. A. Pullen general manager, and 
E. H. Virgil superintendent. Some time thereafter, 
Johnston Livingston and L. W. Winchester, previ- 
ously identified with other companies, became active 
in its management. 

These consoUdations of routes, which connected 
the principal sections of the country and brought 
together in a common enterprise such bright and 
energetic men as those mentioned were known to 
be, laid the foundation for the thoroughly organized 
service of the express as it exists to-day. The 
express had then become a recognized necessity in 
the commercial and individual transactions of the 
country; its lines had ramified in every direction, 
until nearly the whole United States was traversed 
by them ; it had attracted to itself sufficient capital 
to place it on a firm financial basis, and obhgations 
to insure the safe and speedy transmission of mer- 
chandise, valuables, and money were readily as- 
sumed, so that when loss or damage did occur, due 
reparation was promptly made ; and it is current 
history, extending from that time until to-day, that 
whenever goods or valuables in the care of the 
express have been tampered with or stolen, it has 
been swift, sure, and untiring in its pursuit of the 
offenders until adequate punishment was effected. 

In 1 86 1 the Southern Express Company was 
organized to operate in the Southern States, and 
Henry B. Plant became its president. 

Upon the breaking out of the War of the Rebel- 
lion the express was the only means of communi- 
cation between the soldiers in the field and their 
friends at home. For certain of the States it acted 
as the gatherer of the soldiers' votes, and transmitted 
them to the capitals of such States. The new 
securities of the government, which were so largely 
purchased by our people, were forwarded by the 
government through the express — a choice made 
with full knowledge of the fact that the express 
afforded greater safety than the mail. The inter- 
course thus established was, at the solicitation of 
the government, continued after the war had ceased, 
and at its further request a contract was made with 
the Adams Express Company, acting for itself and 
the other express companies, by which the trans- 
mission of all the securities and moneys of the gov- 
ernment was confided to the express. This function 
of the express was especially noted in the award 
which was made at the Columbian Exposition to the 



Adams Express Company, and the testimonial con- 
cluded thus : " The Adams Express Company has, 
by the faithful performance of every trust reposed 
in it, and the discharge of duties devolving upon it, 
enlarged its business to the grand dimensions it now 
enjoys, and has achieved the enviable position of a 
pattern and guide for all similar corporations." 

The further development of the express is remark- 
able for the introduction and perfection of a number 
of facilities necessary to meet the constantly increas- 
ing demands of our 70,000,000 people, — features 
of transportation and attendant services that are 
peculiarly its own, — and chief among which may be 
mentioned its wagon service, now to be found on 
almost every avenue or street of our cities, towns, 
and villages ; and, in conjunction therewith, its em- 
ployment of special cars or trains for transportation 
of express matter at high speed between the princi- 
pal cities. It has to a great extent created the busi- 
ness of transporting varieties of game, poultry, fish, 
oysters, fruit, and vegetables to localities where they 
are not usually obtainable ; it has originated a novel 
method of selling goods for merchants, by collecting 
on delivery the amount of the invoice and returning 
the cash to the shipper ; it has improved the methods 
of collecting the proceeds of negotiable paper, and 
assumes therewith the responsibility of an indorser ; 
it has created and affords the only efficient means 
for the safe transportation of moneys and valuables 
intrusted to it by the general public, the banks, the 
railroads, and the government, and, as indicating 
the general recognition of this specially important 
feature, it may be stated that during a recent year 
there were sent through the express $2,500,000,000, 
and similarly shipped by the government $1,500,- 
000,000, making a total carriage of $4,000,000,000 
in money, no part of which was lost in transit ; it 
has introduced at 40,000 agencies the express money- 
order system, which thus meets almost every citizen 
of the United States at his residence or place of 
business, and there affords him a handy and safe 
means for transmitting his money to any locality, 
such money-orders being universally convertible into 
cash — a convenience not otherwise obtainable, for 
postal money-orders are only purchasable and 
redeemable at large and important offices. This is 
an accommodation also impossible for the banks to 
render, as they are located at less than 8000 points. 
The express has improved the facilities for immedi- 

ate transportation of foreign goods from the port of 
entry to destination, by accepting and carrying them 
under heavy bonds to the government. 

These are some of the features of the express 
which distinguish its services from mere acts of 
transportation, and indicate that its facilities cover a 
much wider range of operations than originally de- 
signed, particularly such as are not afforded by any 
common carrier, and which necessitate the assump- 
tion of obligations and liabilities not contemplated 
by any other agency of commerce. 

The great lines of railway communication are a 
necessary adjunct to the successful conduct of the 
express business, but they are an adjunct only. 
Were the express dissolved the railway lines could 
not supply the needs of the pubHc. There is an 
interval between the act of transportation and the 
demands of the public which railway companies do 
not fill, and were not organized to fill, and which 
renders the express so essential to the general wel- 
fare of the community. The express, in its turn, is 
among the most efficient supporters of the railway 
systems ; it purchases the right of transportation at 
wholesale, and sells it at retail to the public, at prices 
fairly remunerative and universally accepted. 

In round numbers, the routes of the express now 
cover 200,000 miles of railroad, steamboat, and 
stage lines ; the number of packages of merchandise 
annually carried is over 100,000,000; the number 
of money packages transported is 20,000,000 ; the 
number of money-orders issued is 7,000,000 ; it em- 
ploys 50,000 men at 40,000 agencies, uses 15,000 
horses and 6000 vehicles, and it has an aggregate 
capital of over $60,000,000. 

And now, when consideration is given to the 
prominence achieved by the express in the history 
of this country through the services it has rendered, 
not alone to the people at large, but to the United 
States government, there will be no hesitation in 
acknowledging that its usefulness may not be mea- 
sured by any ordinary standard of comparison ; it has 
constantly aided commerce by opening new markets 
for the sale, purchase, and distribution of the pro- 
ducts and manufactures of the country, and has 
promoted individual communications and financial 
transactions to an extent not attainable by any other 
means; it is distinctively of American birth, and 
not elsewhere are there similar instrumentaUties so 
combined in one efficient and complete system. 



IT is not necessary to turn back the pages of his- 
tory a century to present a complete account of 
the inception and development of street-railways 
in the United States or the world. The first horse-car 
ever known appeared upon the street in New York 
as late as 1832, but the idea of conveying people in 
vehicles over iron rails was put to very little practi- 
cal use until nearly twenty years later. The history 
of street-railways in America, therefore, is practi- 
cally confined to the last half-century; and yet there 
are now in the United States nearly 1000 street-rail- 
way systems, with a total mileage of nearly 14,000, 
and a capitalization exceeding the enormous sum 
of $1,300,000,000. These simple figures, of such 
magnitude as to be almost impossible of compre- 
hension, are sufficient to indicate the growth and 
extent of the street-railway service of this country. 

This extraordinary development of the idea, con- 
ceived by John Stephenson, of placing the wheels 
of an omnibus upon iron rails instead of dragging 
them over cobblestones, may be divided into three 
parts : First, street-railways operated with horses as 
separate organizations; second, the substitution of 
mechanical traction by means of a cable ; third, the 
inauguration of electricity as a motive power, with 
all that the adaptation of this wonderful agency to 
practical uses conveys both for the present and the 

Sixty-five years ago, there Hved in New York a 
man who had served his apprenticeship and begun 
work for himself as a builder of carriages. He was 
only twenty-four years old. His name was John 
Stephenson. That he built strong and handsome 
coaches while engaged in that occupation is evi- 
denced by the world-wide reputation which he 
subsequently acquired. That he was not content to 
pursue that occupation in the stereotyped manner of 
his predecessors is shown by the fact that before 
reaching the age of twenty-five he conceived the 

idea of transporting passengers, as millions are 
transported to-day, over rails laid upon the pave- 
ments of city thoroughfares. 

The immediate development of this conception 
was the inauguration, in 1 831, of the New York and 
Harlem Railroad, which obtained a charter to oper- 
ate a street-car line through Fourth Avenue in the 
city of New York. This road was constructed and 
opened in November, 1832, Stephenson building the 
first car drawn over the track. If a duplicate of that 
car should be made to-day, and placed upon the 
street of any city in the Union, it would attract no 
less attention than a Roman chariot. Prior to that 
time there had existed only two forms of public con- 
veyance. One was the English railway-coach ; the 
other was the American omnibus. Stephenson's car 
was a combination of the two. Outwardly it resem- 
bled the omnibuses used on Broadway until a few 
years ago, when they succumbed to the more con- 
venient and comfortable street-cars. Its exterior was 
divided into three compartments, after the English 
idea, and it accommodated, when full, thirty passen- 
gers, or ten in each compartment, besides affording 
seats to perhaps a dozen more upon the roof. Over 
the second door was painted the name of the car, 
"John Mason," after the gentleman of that name, 
who was then the president of the new railroad, as 
well as of the Chemical Bank. Upon the panel of 
the first door appeared the words " New York " ; upon 
the second, " Yorkville " ; and upon the third, " Har- 
laem," then spelled in the good old Dutch way ; and 
in very modest letters, upon one of the steps be- 
tween the wheels of this extraordinary vehicle, 
" Stephenson Patent." 

Although this first of all street-cars would proba- 
bly seem to-day quite as ridiculous as the famous 
" one-hoss shay," it would be unjust to assert that it 
was not an exceptionally good beginning. Judging 
from the picture now before me, there certainly was 




a dearth of springs ; but it must be borne in mind that 
springs were not so common in those days as they 
are now, and that passengers were far less exacting. 
Moreover, the outward appearance of the car, al- 
though cumbersome, was certainly handsome. The 
upholsterings were also said to be of the finest ma- 
terial, and conducive to a sense of luxury. Alto- 
gether, therefore, it must be admitted that John 
Stephenson's first car, considered by itself, was a 
success. Practically, however, it proved a failure 
for the time being. Steam had just then begun to 
be used as a motive power, and all other agencies, 
including this wonderful car, were superseded by it 
wherever it could be employed to advantage. 

In 1837 horse-car service on Fourth Avenue was 
abandoned for steam-cars, and was not resumed un- 
til 1845, and then in a very tentative and unsatis- 
factory manner. In 1852 a French engineer, named 
Loubat, revived the idea in New York city, and a 
road was constructed upon a portion of Sixth Ave- 
nue. During the next eight years about thirty roads 
for horse- car service were constructed in the United 
States. Of these probably the most important was 
the one built from Boston to Cambridge. The com- 
pany which undertook this project made use of the 
old omnibus cars that had been used on Fourth Ave- 
nue in New York. As the traffic increased they af- 
forded additional facilities by placing upon tracks the 
omnibuses which they had formerly used upon the 
road from Boston to Cambridge. It soon became 
apparent that the new form of conveyance was 
destined to achieve general popularity, and one im- 
provement after another was adopted until there 
were produced really very comfortable and attrac- 
tive cars, exactly balanced upon the best of springs 
and handsomely finished, such as are in use in all 
of the large cities of to-day. 

Aside from the personality of the inventor there is 
little that is not commonplace in the history of street- 
cars operated with horses. They served their pur- 
pose as a process of development, but that was all. 
As a rule, they were operated by separate companies 
over short lines, and afforded comparatively little 
convenience to the public. The transfer system, 
which has since attained such great importance in 
the large cities, was unknown, because of the sepa- 
ration and, in many cases, antagonism of the various 
companies. The owners of the roads were not pro- 
gressive, and instead of endeavoring to afford the 
public the best possible accommodation, they exerted 
every effort to obtain the largest revenue from their 
properties. This short-sighted policy produced the 
inevitable result of popular dissatisfaction. Never- 

theless, there soon appeared in New York a striking 
illustration of the fact that street-cars had become, 
and would continue to be, a most important factor 
in municipal life. 

When the elevated railroads were built in this city, 
many people beUeved that the end of the surface car 
had come, but in reahty the companies operating lines 
directly under the elevated structures suffered com- 
paratively little loss even at the beginning, and within 
a few years they had regained their former traffic, 
which has since increased, year by year, until it is now 
larger than ever before in their history. The chief 
cause of this was undoubtedly the increase in popu- 
lation, but another, hardly less potent, lies in the im- 
provement of service, the change of motive power, 
and a natural tendency of the public to prefer sur- 
face transportation to any other method, above or 
below. The first great change, and the first really 
progressive step in street-car service, however, came 
with the substitution of mechanical traction for 
horses, and this brings us to the second chapter of 
our history. 

The first cable railroad in the United States was a 
direct result of physical conditions in the city where 
it was constructed. If all cities in the country had 
been built upon marshes and bogs like Chicago, St. 
Louis, and New Orleans, or even upon moderately 
level ground, like New York, Philadelphia, and Bos- 
ton, it is entirely within the range of probability that 
strands of wire would never have been used for the 
purpose of drawing street-cars. But there existed in 
San Francisco a physical configuration of ground 
which made it impossible to transport people from 
one part of the city to another, from the wharves to 
Nob Hill, by means of horses. Necessity, therefore, 
became the mother of this invention, as of most 
others, and the native Californians, being both quick- 
witted and enterprising, were not slow in the exercise 
of ingenuity. 

To Andrew S. Hallidie belongs the credit of adapt- 
ing the theory of cable traction to successful practical 
use. In 1872 he obtained a patent upon a cable grip. 
Meanwhile he had prepared plans for the building of 
a cable road, and far-seeing capitalists of San Fran- 
cisco had pledged the requisite financial support for 
its construction. The work was pushed forward with 
the energy characteristic of the far West, and in Sep- 
tember, 1873, the pioneer cable railroad of the world 
was put into operation on Clay Street, San Francisco. 

Many doubted the success of this new method, and 
more questioned its safety. The road was only about 
a mile in length, and yet rose from a low level ter- 
minus to a height of nearly 300 feet. It is said the 



first gripman who operated a car over this road 
ahghted at one stage in its descent and insisted that 
he could not, in justice to his family, proceed further 
unless there should be attached to the car a steel rope 
above the surface of the ground which he could actu- 
ally see and rely upon to save a corporation from the 
payment of his Hfe-insurance. This difficulty having 
been overcome, either by the attachment of the rope 
or by persuasion and threats — upon which the his- 
tory of California is less specific than might be de- 
sired — the car continued without accident, and after 
a few days a service was given of sufficient regularity 
to make certain the success of the experiment. 

This result accomplished one immediate effect. It 
proved beyond a question that heavy cars loaded 
with people could be drawn by cable up and down 
the steepest grades, without the expenditure of an ex- 
traordinary amount of money, and without menace 
to the lives of passengers. Unfortunately for the 
quick development of the new idea, this was the 
only problem solved by this first cable road. It was 
a perfectly straight track, containing none of the 
curves, depressions, and tortuous routes necessarily 
used or followed by street-car lines in the majority 
of large cities. For this reason the experiment at- 
tracted no more interest than that which for several 
years naturally attaches to a novelty ; but the people 
of San Francisco, daily seeing and understanding the 
merits of the new system, appreciated its advantages 
over the old, and in 1876 supplemented the Clay 
Street road with another on Sutter Street, and three 
years later with one on Union Street. 

In 1882 Chicago, either from jealousy of another 
western city winning the laurels of a first effort in any 
direction, or from the reputed far-sightedness of its 
capitalists in taking advantage of public needs, in- 
augurated a cable railroad considerably more pre- 
tentious than the one which had been built in San 
Francisco. Charles T. Yerkes was the leading spirit 
in this enterprise, achieving not only a success for 
the city, but a fortune for himself. A year later, 
slow-going Philadelphia followed the lead of Chi- 
cago and built a cable railroad two and one half 
miles in length, which has since given way to the in- 
vincible power of harnessed electricity. 

New York, more conservative than any of its sister 
cities, and notoriously jealous of experiments upon its 
streets, finally accepted the tests in San Francisco, 
Chicago, and Philadelphia as satisfactory, and au- 
thorized the construction of the present cable rail- 
roads on Broadway and Third Avenue. Here, for 
the first time, was introduced the duplicate system 
which has since become a practical necessity upon 

lines where traffic is heavy, and where an interrup- 
tion, even for the fraction of an hour, is extremely 
costly to the operating company. 

Other cable railroads were built in every section of 
the country except New England^ and there are now 
in operation in the Eastern States, 157 miles; in the 
Central States, 252 miles; in the Southern States, 6 
miles ; and in the Western States, 217 miles ; — making 
a total of 632 miles of cable railroad now in opera- 
tion, although soon, in my judgment, to be super- 
seded by the more tractable, more economical, and 
less objectionable electricity. If this prediction should 
prove to be correct, it is obvious that the invention and 
use of the cable as a motive power deserves no more 
attention than it has received, for the reason that it 
will have been only tentative and a filling of the gap 
between the quadruped and the magic fluid. 

Far more important than the success, however 
great or small, of this method of traction, was the 
fact that its discovery led directly to the consolida- 
tion of distinct street-railroad companies in such a 
way as to enlist more capital, more brains, and more 
energy in the development of street-car service. Just 
as the primary credit for introducing the cable-system 
belongs to Mr. HaUidie,so does the yet greater credit, 
so far as practical results are concerned, of working 
out the idea of efficient consolidation, belong to 
Henry M. Whitney. 

There were at that time innumerable street-car 
lines in Boston, operated, as in all other cities, as sepa- 
rate organizations, and affording accommodations 
wholly inadequate to the demands of the public. Mr. 
Whitney conceived the idea of a general consolida- 
tion of all these companies in such a way as to make 
possible the substitution of a better form of motive 
power, more direct routes, and a general improve- 
ment in every direction. His first intention, when 
he had accomplished the great work of uniting the 
many adverse interests involved, was to introduce 
the cable, but before he had fully succeeded in his 
primary undertaking to such an extent as to warrant 
reconstruction, the most important event in the his- 
tory of street-railroads took place. 

Electricians had believed and asserted for years 
that the wonderful power to the adaptation of which 
to practical uses they had given much intelligent 
study, could be utilized directly in the drawing of 
heavy loads. Edison built the first electric road in 
America at Menlo Park, New Jersey, in 1880, and 
three years later the same great inventor, cooperating 
with Stephen B. Field, built a similar road for tem- 
porary use at the Chicago Exposition in 1883. Leo 
Daft at the same time was making similar experiments 



in Baltimore, Pittsburg, and other places; and Charles 
J. Vandepole was doing likewise in Toronto. None 
of these, however, had reached such a point that its 
practical value was demonstrated beyond a doubt 
at the time when Mr. Whitney engaged in his work 
of consolidation in Boston. But, in 1888, Frank J. 
Sprague, first among the younger electricians of 
America, obtained sufficient capital to make an actual 
test upon a street in the city of Richmond, Virginia. 
He brought together the best features of all the sys- 
tems which had then been devised, applied to motive- 
power the fundamental principles which he had 
learned in building electric-Ught plants and estab- 
lishing stationary motors; added new and simple, 
but effective, methods of motor-control and suspen- 
sion, and in general worked out a well-defined system, 
the essential features of which have not been changed 
in the seven years which have elapsed since he in- 
stalled the first practical electric railroad in the 
United States. 

His work in Richmond naturally attracted the at- 
tention of men engaged in the street-railway business, 
and scores visited the famous old Virginia capital to 
behold its actual operation. Among these were Mr. 
Whitney and Messrs. Widener and Elkins of Phila- 
delphia. They appreciated at a glance the possibil- 
ities of the new invention, and after making most 
thorough examinations personally, as well as through 
expert engineers and electricians, did not hesitate to 
adopt, expand, and improve it in every possible direc- 
tion. Mr. Whitney at once abandoned the idea of 
laying a cable under the streets of Boston, and began 
forthwith to lay the foundations of the great West 
End system, which is now the largest in the world in 
point of carrying capacity and revenue. Mr. Widener 
and Colonel Elkins proceeded with no less vigor to 
consolidate and electrify the principal lines of Phila- 
delphia, and within three years after the Richmond 
road was inaugurated, there were hundreds of miles 
of overhead trolley-lines in successful operation in 
the streets of nearly every large city in the Union. 

Since that time the work of changing old horse-car 
lines into modem electric railways by the overhead 
system has progressed so rapidly that there are now 
in actual operation in New England 1392 miles; in 
the Eastern States, 3189 miles ; in the Central States, 
3578 miles; in the Southern States, 743 miles; and 
in the Western States, 146 1 miles ; making a total of 
more than 10,000 miles of overhead trolley-lines now 
in actual operation, against less than 2000 operated 
by horses. 

It will thus be seen that the development of the 
overhead trolley system has been one of the most 

rapid ever known, in a change so radical and in- 
volving so many untried elements. This has been 
due no less to a spirit of competition among rival 
electrical companies than to the public demand for 
improved facilities for local transportation. The 
two or three large companies engaged in the busi- 
ness of furnishing electrical supplies so thoroughly 
appreciated the possibilities of the new method, that 
they invested millions of dollars, not merely in the 
building of extensive plants, but in the perfecting of 
their individual systems. The inevitable result has 
been the concentration of an abundance of ability 
and energy in solving the difficult problems involved 
in the adaptation of electrical power to this most 
practical of uses. 

Under this stimulus improvement has followed 
improvement so rapidly that Uttle apparently re- 
mains to be achieved. Cars are now run in hun- 
dreds of cities by devices so simple that skilled labor 
is no longer essential to their operation, and they 
are both lighted and heated by the same current 
which propels them. Moreover, all this is done far 
more economically than was ever possible through 
operation with horses or by cable. Chief among 
the important effects of electrical operation has been 
the building of roads of a very few miles in length, 
which, despite their limitations of both district and 
patronage, can be and are conducted at so small a 
percentage of gross receipts, as to produce a fair 
profit upon the investment. 

It was formerly supposed — and the supposition, 
while horses and cables afforded the only means of 
motive power, was correct — that street-car service 
could be used to advantage only within the limits of 
a city or village. But since the introduction of elec- 
tricity has widened the possibilities and increased 
the diversity of such traffic, it has been found 
distinctly profitable to connect municipalities and 
towns having common interests by the new sys- 
tem. A notable illustration of this fact is afforded 
by the great success of the trolley road connecting 
Minneapolis and St. Paul. Before this line was es- 
tablished the steam railroads operated scores of 
trains of cars between the two cities daily, for the 
sole purpose of accommodating the local traffic. As 
soon, however, as the trolley road was put into suc- 
cessful operation, the demands upon the steam rail- 
road decreased rapidly, and have gradually been 
reduced to such a point that nearly, if not quite, all 
of the steam-railroad trains formerly operated for 
this purpose have been taken off. A more recent 
but hardly less striking illustration of the same tend- 
ency is afforded by the new trolley lines connecting 

Herbert H. Vreeland. 



Newark, Elizabeth, and Jersey City. Indeed, it is 
now an established fact, that on distances not ex- 
ceeding ten miles, the steam-road cannot compete 
with the trolley because of the more frequent, more 
cleanly, cheaper, and more pleasant accommoda- 
tions offered by the latter. 

The most recent development of the trolley idea 
has been the creation of an entirely new traffic, 
namely, that of riding upon street cars for mere 
pleasure. Few people appreciate the extent of the 
demand for this branch of street-car service; but 
an instance is afforded by the fact that so-called 
" trolley parties " during the past summer added 
more than seventy thousand dollars to the receipts 
of Philadelphia companies alone. Street-car man- 
agers themselves have only begun to appreciate the 
magnitude of business which may be created by 
offering exceptional accommodations for pleasure- 
seekers, and the development of the idea has, con- 
sequently, only begun. That it will become a de- 
cided factor in the operation of trolley lines, espe- 
cially in suburban districts, is now beyond question. 

There have been, and always will be, objections 
to the overhead trolley. Some are founded upon 
reason, but more upon fancy, and it is a fact that 
in the great majority of cases, where the introduc- 
tion of the system was most bitterly opposed, its 
removal now could by no possibility obtain the as- 
sent of the pubhc. Only in the largest cities, where 
overhead wires of any description are objectionable 
because of the density of population and the serious- 
ness of placing any obstacle in the way of extin- 
guishment of fires, is there any good reason for 
opposing its introduction and use. These objec- 
tions, and the natural conservatism of the commu- 
nity, have prevented the adoption of the new 
method in New York city. The direct result of 
this condition of affairs has been the inauguration, 
during the past few months, of an experimental 
railroad, operated by electricity, conveyed through 
wires strung in a conduit beneath the surface of the 
ground. For this experiment, which now bids fair 
to achieve success, the far-sighted directors of the 
Metropolitan Traction Company are entitled to full 
credit. They saw the necessity of overcoming the 
objections to the overhead system, and at the same 
time of superseding both horses and cables. 

With this object in view they sent to Budapest, 
where an underground system had been in opera- 
tion for several years, Mr. F. S. Pearson, one of the 
most capable and resourceful electrical engineers in 
the country. Mr. Pearson made a careful examina- 
tion of the system there in use, studied the condi- 

tions, climatic and otherwise, which would make 
necessary certain changes, and finally worked out 
a plan which he submitted to the directors of the 
Traction Company, with an assertion of his belief 
that, if tried properly, without an attempt to save 
money in making the experiment, it would prove 
successful. The road was constructed upon the 
lines thus suggested, and has been in operation 
several months under my direction. During this 
time no accident of any kind has taken place, and 
no money has been required or expended for main- 
tenance or changes. Although far more expensive 
in construction than the overhead trolley, it is also 
far more satisfactory in operation when once built. 
It only remains to be seen whether this system, the 
success of which in fair weather has already been 
demonstrated, will be found capable of defying the 
severe storms of the winter and spring months in 
northern American cities. If so, it will undoubt- 
edly become the favorite system in large cities, as 
it comprises all the advantages, with none of the 
disadvantages, of the overhead trolley over cables 
and horses. Storage-battery systems have been 
tried at various times in various places, but so far 
have met with so little success that, although afford- 
ing apparently the ideal system, they have not yet 
reached the point of efficiency which warrants se- 
rious consideration. 

It is not of the future, however, that I am sup- 
posed or would presume to write, and regarding 
the past, all has been said in detail that can be said 
within limits which would not trespass upon the 
patience of the reader. In summarizing, I can only 
add that there have been four great events in the 
history of the street-railways of America during the 
past seventy years. The first was the invention of 
the primitive street-car by John Stephenson. The 
second was the use of the cable by Andrew S. Hal- 
lidie. The third was the harnessing of electricity 
to the street-car service by Frank J. Sprague. The 
fourth, and most important of all in actual result, 
has been the outgrowth of Henry M. Whitney's 
idea of consolidation, which has resulted in a benefit 
to the American people so vast as to be incalcu- 
lable, and in the investment of hundreds of millions 
of dollars in an industry which could never have 
been created or imagined in any age other than that 
in which we live. As an interesting and valuable 
summary of the magnitude of the street-railway busi- 
ness of the country, I present the following tables, 
obtained from the census reports of 1890 and from 
other equally rehable sources of a much later 




Stbam- Railways. 

Pkr Cent, of 
Total Steam- 

Length of line (miles) .... 





Length of line (miles) 

Passenger cars 










Passengers carried 

Passengers carried 



All Motive Powers. 






Length of line (miles) . . . 
Length of all tracks (miles) 
Passenger cars 






134,905,994 ^ 




Passengers carried 

Total cost 




Baltimore, Md 

Boston (including Lynn and Cambridge), Mass 

Brooklyn, N. Y 

Buffalo, N. Y 

Chicago, Ills 

Cincinnati, Ohio 

Denver, Col 

Kansas City, Mo 

Ivouisville, Ky 

New Orleans, La 

New York, N. Y 

Philadelphia, Pa 

Pittsburgh, Pa 

St. Louis, Mo 

San Francisco, Cal 

Washington, D. C 




Passengers Carried. 











Average Number 
OF Rides per 










Mixed and 

Total cost of construction and real estate . . . 
Miles of line to which this cost pertains . . . . 
Cost of construction and real estate per mile. 

Total cost of equipment 

Miles of line to which this cost pertains .... 
Cost of equipment per mile 










^ $30,35 '.63 
















. 361.83 








Total cost per mile 


The above table gives a comparative summary 
of the cost of each five classes of roads making 
completed reports. It will be noticed in this table 

that cost of road is given in two principal items, 
viz., "Total cost of construction and real estate," 
and " total cost of equipment." 






Capital Stock 

Issued and 


Rate of Divi- 
dends Declared 
(Per Cent.). 

Funded Debt 

Issued and 


Rate of In- 
terest Paid 

All motive powers 


































6. II 



Steam . . 

Mixed and inseparable 


The above table covers only those roads report- 
ing the payment of either dividends or interest, as 
the case may be. 

Now, turning from the facts and figures, as given 
by the census reports of 1890, the following data, 
compiled from other equally reliable sources, are 
of more recent date, covering the years 1892, 1893, 
and 1894. But before entering upon the details of 
the same, it may be well to make some additional 
general comparisons between the street-railways and 
the steam-railroads of the United States. The former 
represent about seven and one-half per cent, of the 
mileage of the latter, and in passenger receipts, 
about forty-five per cent. The total capitaliza- 
tion, bonds, and stocks, of the steam-railroads in 
the United States, is about $11,000,000,000, and 
of the street-railways, about $1,300,000,000, the 
latter being about eleven per cent, of the former, 
while the profits of the steam-railroads were $332,- 
000,000, and of the street-railways, about $43,000,- 
000, thus making the latter about thirteen and one- 
half per cent, of the former. 

Of the 976 operating street-railway companies 
reported in "American Street- Railway Investments," 
109 have been first selected as presenting the most 
complete reports for the past three years. They 
represent about twenty-two per cent, of the total 
mileage of the country — their capital stock amount- 
ing to $200,497,681, their funded debt to $193,- 
844,145, and their gross capital liabilities to $394,- 
341,826. Their capitalization is about thirty per 
cent, of the total capitalization of American street- 
railways. The report of these roads is as follows : 

1892. 1893. 1894. 

Gross receipts $56,119,612 $63,165,976 $57,232,545 

Operating expenses 36,787,919 40,010,812 35,863,607 

Earnings from operation. $19,331,693 $23,155,164 $21,368,938 
Fixed charges 8,834,282 10,373,510 11,118,217 

Net income $10497,411 $12,781,654 $10,250,721 










Per cent, operating expenses to gross 

receipts 65.6 

Per cent, fixed charges to gross re- 
ceipts 15. 7 

Per cent, net income to gross receipts. 18. 7 

Per cent, net income to capital stock. . 5.2 

The combined reports of 146 street-railroad com- 
panies, representing capital stock, $240,477,324; 
funded debt, $231,091,645; capital habilities, $471,- 
568,969 — or thirty-six per cent, of the total liabili- 
ties of the country — make the annexed showing for 
the years 1893 and 1894: 

1893. 1894. 

Gross receipts $71,847,580 $65,791,187 

Operating expenses 45,697,130 41,205,904 

Earnings from operation 26,150,450 24,585,283 

Fixed charges 12,281,424 13,329,765 

Net income $13,869,026 $11,255,518 

1893. 1894, 

Per cent, operating expenses to gross receipts. . 63.6 62.6 

Per cent, fixed charges to gross receipts 1 7.1 20.2 

Per cent, net income to gross receipts 19.4 17.2 

Per cent, net income to capital stock 5.8 4.7 

The combined operating report of 232 Amer- 
ican street-railway companies — representing capital 
stock, $316,762,149, funded debt, $278,995,755, 
and capital liabilities, $595,757,904, or about forty- 
six per cent, of the total capital liabilities of the 
American properties — make the showing as below 
for the financial year ending June 30, 1894 : 


Gross receipts $84,664,338 

Operating expenses 53,175,278 

Earnings from operation $31,489,060 

Fixed charges 19,387,729 

Net income 


Per cent, operating expenses to gross receipts 62.8 

Per cent, fixed charges to gross receipts 22.9 

Per cent, net income to gross receipts 14.3 

Per cent, net income to capital stock 3.8 

The mileage, cars, capital stock, funded debt, 
and capital liabilities of the street-railways in the 



United States — some 976 in number — made at the 
beginning of the present year, make the following 
showing : 

Aside from the accommodation afforded the resi- 
dents of the territory through which the roads run, 
it is a source of profit to the railroad companies. 

(i) Includes Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut; (2) New York, New Jersey, Pennsylvania, Delaware, 
District of Columbia, Maryland, Virginia, and West Virginia; (3) Michigan, Ohio, Indiana, Kentucky, Wisconsin, Illinois, Minnesota, Iowa, Missouri; 
(4) North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Tennessee, Louisiana, and Kansas; (5) South Dakota, Nebraska, Kansas, 
Texas, Colorado, Montana, Idaho, Utah, Washington, Oregon, and California. 

As to the recent innovation — involving the pla- 
cing of postal-cars upon street-railways — the St. 
Louis and Suburban Railway Company of St. Louis 
was the first of the kind in this country to make the 
movement in this direction, by running from the 
business part of the city to the choicest residence 
and suburban portions of the town of Florisant, 
distant sixteen miles from the center of the city. 
This began several years ago, and was followed by 
Brooklyn, over the Atlantic Avenue line to Coney 
Island, in August, 1894; by Boston, in April or 
May, 1895 ; by Philadelphia, to Chestnut Hill and 
Passayunk, June i, 1895, and to Manayunk, Oc- 
tober I, 1895; and by New York, over the Third 
Avenue line, October i, 1895. For these mail-cars, 
the railway companies furnish conductors and mo- 
tormen, while the Post-Office Department supplies 
the mail-clerks. 

The cars are built especially for the purpose, 
equipped with their own motors, and furnished with 
the necessary desks, cases, racks for mail-bags, etc. 
This mail service has now been in operation, as 
already noticed of St. Louis, for about three years, 
and new features are being constantly added to it. 

The question as to whether or not such mail ser- 
vice is called for, depends almost entirely upon 
local conditions, — the length of the road, the ter- 
ritory through which it runs, the proximity of de- 
pots and post-offices to the Hne of the road, and 
many other considerations. An advantage, inde- 
pendent of any financial return, and one which is 
regarded by many as the one reason for street- 
railways embarking in this service, lies in the pres- 
tige of the government's name. This point was 
never so thoroughly illustrated as in the late troubles 
in Chicago in the transmission of the United States 
mail, which has precedence or right of way above 
all else. As the Second Assistant Postmaster-Gen- 
eral governs all transportation of the mails, the 
street-car postal service is within his province, 
and has now become part and parcel of the pos- 
tal railway system of the country. The fuller de- 
velopment of this system is only a question of time, 
and its progress will be viewed with more or less 
interest until it becomes a permanent and wide- 
spread factor in the distribution of the mails in 
the larger cities to their suburbs. 



" There is nothing that has yet been contrived by man by which so much happiness is produced as by a good tavern or 
inn." — Dr. Johnson. 

" Shall I not take mine ease at mine inn? " — Shakespeare. 

' ' Whoe'er has traveled life's dull round, 
Where'er his stages may have been, 
May sigh to think he still has found 

The warmest welcome at an inn." — Shenstone. 

IN old colonial times many of the inns in the 
towns and scattered along the few routes of 
travel bore such names as " King's," " Queen's," 
" Red Lion," and the hke ; but the revolt of the 
colonies produced a change, and these names gave 
place to those in harmony with the spirit of the 
time. The portrait of Washington replaced that 
of George III. on the swinging signs, as these once 
quiet taverns became the meeting-places of patriots. 
Clustered about many of them are historic memories 
of special scenes and events, and of the men of the 
Revolution and of the formative period immediately 
following. Washington was a guest of the City 
Tavern, Philadelphia (1775); the Bunch of Grapes 
Tavern, Boston, where he enjoyed "'an elegant din- 
ner provided at the public expense, while joy and 
gratitude sat on every countenance and smiled in 
every eye" (March 28, 1776); the True American 
Inn, Trenton (1777); Arnold's Tavern, Morristown ; 
Suflferin's Tavern, Smith's Clove, New York; the 
Buck Tavern, near Philadelphia (after the battle of 
Brandywine) ; Smith's Tavern, Smith's Clove (i 779) ; 
the tavern at East Chester, New York, where he 
was ill (1780) ; the Fountain Inn, Baltimore (1781) ; 
Day's Tavern, Harlem (with Governor Clinton, 
1783); Fraunces Tavern, New York, where in the 
assembly-room he bade farewell to the faithful men 
who, with him, had achieved the liberties of the 
States ; Mann's Hotel, Annapolis, from which he 
proceeded to the Congress and resigned his com- 
mission ; and the City Hotel, Alexandria, where he 
was entertained by the Alexandria Lodge, of which 
he was a member. The tavern where Washington 

stayed during an illness at East Chester was built 
early in the seventeenth century, and now stands 
within the New York City limits. The room occu- 
pied by him remains as he left it. Lafayette was 
entertained there later. For a season the house was 
in a sense the seat of government, when President 
John Adams sojourned at East Chester during the 
yellow-fever epidemic at the then capital, Philadel- 
phia. There was also the Catamount Tavern, Ben- 
nington, Vt. ; George Bums' Coffee- House, New 
York, the lounging-place of British officers, and at 
the same time privately frequented by the Sons of 
Liberty during the British occupation ; the Tun 
Tavern, Philadelphia, in which the first masonic lodge 
in America was organized ; the Rose Tree Inn, at 
Media, Pa. ; the City Tavern and the Bird in Hand, 
Richmond ; and many others. From the memories 
that haunt these ancient hostelries oiu* literature has 
drawn much of its inspiration. The red Wayside 
Inn at Sudbury inspired the thought that it was 

" Built in the old colonial day, 

When men lived in a grander way, 
With ampler hospitality." 

In 1795 our inns were kept on the "American 
plan," which embodied a fixed price for a day and 
for each fraction of a day. One dollar a day was 
then considered a good round price. As a rule the 
tavenis were small ; one containing twenty rooms 
was regarded as a commodious house. The rooms 
were comfortable and the furniture plain and strong ; 
carpets were rarely found. The meals were served 
at fixed hours, and at the summons of gong or 




bell, to which all guests were expected to respond 
promptly. The cooking was done by the "land- 
lady " and her assistants. The table was abundantly 
supplied with palatable and substantial dishes, among 
which meats predominated. Game was compara- 
tively more abundant than now ; and as the Western 
regions, especially, were opened to settlement, some 
taverns kept their hunters. Vegetables and fruit 
were plentiful in New York, but in most localities the 
variety was limited, many coming into use since that 
date — tomatoes, for example, about 1840, and celery 
still later. Fresh sea-fish could not be carried far 
inland without deterioration, and transportation to 
a distance of the salted sea products was expensive. 
In the towns ice came into early use, — in wide con- 
trast with the custom in foreign countries, — and ices 
appeared on the tables in 1793. In some districts 
it was difficult for a time to get good milk, owing 
to the repulsive flavor given it by the wild garlic 
and other grasses. Decanters of liquors were upon 
many hotel tables, from which the guest could serve 
himself freely. The favorite wine of the period was 
Madeira, the others used being mainly port and 
sherry. There were no bills of fare, the food being 
placed on the table, and any information desired 
concerning it being given by some person at hand. 
In the Southern States the landlord frequently 
called out the names of the dishes in a loud voice, 
and each guest — whom the landlord usually knew 
personally — would then express his wish. In the 
main these taverns were generously conducted for 
the " entertainment of man and beast " ; and a bar, 
a ball-room, and a stable were necessary adjuncts. 
The first Congress met in New York, then the capi- 
tal of the RepubHc, in 1789, and the members were 
mostly accommodated at private boarding-houses, 
which were relatively more important than now. 
Talleyrand, as well as other distinguished travelers, 
made use of these houses. They were located at the 
Battery, lower Broadway, Cedar Street, and Maiden 
Lane. Their number increased with the times, and 
330 licenses were granted the year of the first Con- 
gress. People from other places complained of the 
high prices of the New York taverns and boarding- 
houses, as " board of the Congressmen was paid out 
of the common treasury, to which every citizen of 
the United States contributed his share." This wail 
was met by the statement that " board ranges from 
three to seven dollars a week " ; and one of the 
houses was cited as furnishing " from seven to nine 
dishes a day, with four sorts of liquor." 

In 1795 the taverns of consequence were in New 
York, Philadelphia, Boston, and Baltimore. Those 

in New York were Fraunces (first opened in 1762 as 
the Queen Catherine), which was the largest during 
the Revolution, containing about thirty rooms ; the 
City Hotel, erected in 1793, on the site of George 
Biu-ns' Coflfee-House (upon which the Boreel Build- 
ing now stands), where the fashionable City Assem- 
bly met, and which was frequented by the so-called 
" Three Hundred "—not " Four Hundred "—of that 
day ; Bunker's ; Washington Tavern ; and the Ton- 
tine Coffee- House in Wall Street. It was at the last- 
named house that the historic dinner was given to 
John Jay, May 30, 1795, in honor of his return 
from concluding the first commercial treaty between 
the United States and Great Britain ; and here the 
" Century of Commerce " may almost be said to have 
been initiated. 

In 1809 the two-hundredth anniversary of the dis- 
covery of Manhattan Island by Henry Hudson was 
celebrated at the City Hotel, in a manner which at- 
tracted universal attention, there being " a banquet 
in keeping with the historical spirit of the occasion, 
all modern delicacies having been rigidly excluded." 
In December, 181 2, at the same hotel, 500 gentle- 
men attended the banquet in honor of the naval 
heroes, Hull, Decatur, and Jones. De Witt Clin- 
ton presided, with Decatur on his right and Hull 
on his left. The banquet-hall " had the effect of a 
great marine palace," and " other siirprises of the 
most novel and stirring character enraptured the as- 
semblage," The following month Decatur's gallant 
crew were dined at the same place, amid the same 
decorations. It was here, also, that Lafayette was 
sumptuously entertained in 1824. 

In the first quarter of the present century the lead- 
ing men of the larger towns seem to have realized 
that the hotel, as a rule, was the index of the place 
of its location. A good hotel meant a prosperous 
town, and a public-spirited town would have a good 
hotel. When the general government became per- 
manently established at Washington, the regular 
joumeyings to and fro of public officials, members 
of Congress and their families, and foreign ministers, 
resulted in the appearance of good hotels for their 
entertainment in the principal towns and along the 
various routes of travel. These were graced by the 
familiar presence of the eminent Northern and East- 
ern statesmen, from the time of Hancock, Adams, 
and Otis to that of Webster and others, on the route 
from Boston; and of Jackson, Clay, Benton, and 
Cass along the old Government Road over the 
mountains from the Ohio River. It was at a hotel 
in St. Louis — the Missouri — that the first governor 
of the then new State of Missouri was inaugu- 



rated in 1 821, and that the legislature convened and 
elected Benton Senator. The increasing desire for 
more commodious and comfortable hotels — for the 
pretentious ones were now all called hotels — con- 
tinued to manifest itself. The National Hotel was 
opened in Washington in 1827, and at once became, 
and continued for a whole generation, the home of 
eminent public men, and is rich in memories of 
events of vast national interest. The principal tav- 
erns in Boston were Doolittle's City Tavern, the 
Eastern Stage House, and the Lamb Tavern. The 
Tremont House was opened there in 1829 by 
Dwight Boyden, and was the grandest hotel in 
the land. It was even claimed at the time to be 
the largest and most elegant hotel in the world, and 
certainly there was nothing equal to it in England. 

It was about 1830 that Delmonico introduced in 
New York the high-class restaurant. Previous to 
that there had been great monotony in the dishes 
served at the better restaurants, and the flavoring 
was limited. Delmonico used new flavors ; gave 
new " fancy " dishes ; brought into more general use 
claret, champagne, and the light wines of Germany 
and France ; and served bread and coffee superior 
to anything before known in America. In 1833 ^^^ 
United States Hotel, New York, — now standing in 
Fulton Street, — was opened. In 1834 the Louisville 
Hotel, and in 1835 the Gait House at Louisville, 
were opened, and their names are perpetuated in 
fine houses. In 1835 the United States Hotel was 
opened in Boston, and has since been greatly en- 
larged. At about this period the old Washington 
Hotel, Portland, Me., which opened before 1823, 
took the name of the United States, and has also 
been enlarged from time to time. The Rocking- 
ham at Portsmouth, N. H., once the palatial home 
of Governor Langdon, was opened in 1834, and 
came into high repute. It has recently been rebuilt. 
Up to 1836 there were few hotels in the world that 
could accommodate 200 people. 

In 1836 New York opened its rival to the Tre- 
mont, the Astor House, built, hke the former, of 
massive granite. This became at once the resort of 
the wealthy and of men in public life. For a time, 
under Coleman & Stetson, it was the one place in 
which to meet distinguished people, and it is still 
prosperous. Barnum's Hotel at Baltimore opened 
about this date, and eclipsed the hitherto important 
houses there — the Washington, Eutaw, and the rest ; 
although the United States Hotel still held the 
patronage and friendship of Webster and others. 

The most important hotel event of 1836 was the 
opening of the St. Charles Hotel, New Orleans, in 

the center of the "American town," fronting upon 
three streets, with its stately portico in the style of a 
Corinthian temple, the vast rotunda surmounted by 
dome and cupola, — next to the Capitol at Washing- 
ton the most imposing structure in America, — finely 
appointed for that day, and accommodating more 
than 700 persons. Rich planters of vast estates then 
dominated the South, and with their families and 
retinues of valets and maids came from their coun- 
try houses in winter to the Southern cities. New 
Orleans was the metropolis, and the St. Charles be- 
came the most famous hotel in the country — thronged 
throughout the season by tourists from abroad. 
Northerners in search of health or a mild«r clime, 
and by the intellect, wealth, and beauty of the 
ancient glory of the Southland. This fine hotel 
was destroyed by fire in 1851, rebuilt in 1852 with 
all the former exterior grandeur except the dome, 
and with more interior splendor, and continued a 
career of increased popularity and charm until the 
outbreak of the Civil War. It was again burned in 
1894, and a new St. Charles is now about to open. 
In 1839 the Charleston Hotel was opened at Charles- 
ton, and burned on the same day. It was rebuilt 
and reopened in 1840. It was the frequent resort 
of Calhoun and his great Southern compeers, and 
continues to be the leading hotel of the city. In 
1 84 1 the Planters' House, St. Louis, was opened, 
being the "largest hotel west of the mountains," 
and equal to any east in furnishing and appoint- 
ments. It had 215 rooms, a classic ball-room, a 
floor-space "89 11 square feet more than the cele- 
brated Tremont House in Boston " ; the china and 
cutlery were made in England, and the name of 
the house " fired on the china." Dickens stopped 
there in 1842, and even spoke favorably of it in his 
"American Notes." A magnificent new Planters' 
House now occupies the old site. The house was 
opened by Stickney & Knight, who came from Bos- 
ton. It is well, perhaps, to say here that New Eng- 
land was the nursery of a very large majority of the 
prominent hotel men of this country. The Massa- 
soit House, Springfield, Mass., one of the celebrated 
New England houses, opened in 1843. The name 
reminds one not only of the Indian chief, but sug- 
gests the fact that much might be written of the spe- 
cial dishes of certain hotels, prominent among which 
would appear the old Massasoit " waffle." The New 
York Hotel was opened about this period, and soon 
became, and continued for many years, the favorite 
summer resort of the people of wealth and distinc- 
tion from the Southern States. The Delavan House 
at Albany was opened in 1845. 



The year 1847 will ever be remembered in hotel 
annals as the date of the opening of the Revere 
House, Boston, by Paran Stevens. It immediately 
took the first rank and commanded the best patron- 
age of the country. The gathering there at the time 
of the funeral of President John Quincy Adams in 
184& was the most notable assemblage, up to that 
date, ever seen in the country outside of Washing- 
ton. Mr. Stevens here introduced his advanced ideas 
of a system of management so liberal, so thorough 
in its details, and so comfortable, pleasing, and even 
luxurious, that the Revere became the pattern for 
American hotels ; and his subsequent achievements 
in connection with several of the great hotels of 
the country, upon the same broad and careful lines, 
justly caused him to be regarded as the most emi- 
nent man of his vocation. The principal hotels in 
Philadelphia in 1830 and later were the Mansion 
House, United States, Washington, City, and others. 
In 1850 the Girard House was opened, and con- 
tinued to be the principal house for ten years. In 
the same year was opened the Burnett House at Cin- 
cinnati, with its 250 bedrooms, large drawing-rooms, 
and spacious corridors and public conveniences. 
The Eagle Hotel, Richmond, of high repute, where 
Lafayette was entertained in 1824, was burned in 
1840, and about 1850 the Exchange and Ballard's 
were opened. The same year the Clarendon was 
opened in New York on the European plan, and 
the Irving House was in successful operation. The 
first Tremont House, Chicago, soon appeared on 
the lists, and was for some time the leading hotel 
there ; and at the same time Colonel McMicken, of 
musical voice, continued to call out his bill of fare 
in the large dining-room of the Washington Hotel 
at Vicksburg. In 1852 the Battle House, Mobile, 
was opened by Messrs. Darling & Chamberlain, 
Paran Stevens being interested with them. It was 
here that Mr. Darling successfully introduced for the 
first time on a large scale in the American hotel the 
system of serving breakfasts cooked to order. The 
house was admirable in its management, the social 
life was akin to that of the St. Charles in its palmy 
days, and it was here that the gracious courtesy of 
Madame Le Vert and her fair coterie was exercised. 
The popular St. Louis Hotel, New Orleans, was then 
in successful operation, under the genial Colonel 
Mudge. About that time (1852) the St. Nicholas 
and the Metropolitan were opened in New York, both 
very large houses, upon a more expensive scale, in 
some respects of furniture and decoration, than any 
that had preceded them, introducing " bridal cham- 
bers " and other novelties, and being sought by the 

best patronage. In 1854 the Brevoort and Everett 
were opened, on the European plan, and, like the 
Clarendon, were of a high order; and in 1855 the 
famous Parker House, also on the European plan, 
was opened in Boston. 

In 1859 the Fifth Avenue Hotel, Madison Square, 
New York, was opened by Messrs. Stevens, Darling, 
and Hitchcock (Hitchcock, Darling & Company). 
The building covers eighteen city lots, and every ad- 
vanced idea in construction was availed of — heavy 
subdivision walls of brick every twenty-five feet 
from foundation to roof, with two inches of cement 
on every floor, flush from wall to wall, making it 
practically fire-proof. As to the exterior, an eminent 
author on architecture, writing of Roman palaces, 
remarks : " The best type of palatial structure is the 
Farnese Palace. The edifice is a classic, a standard, 
the very perfection of house building, and in style 
it looks familiar to us. It is not unlike the Fifth 
Avenue Hotel." The same classic spirit pervades the 
interior of the hotel in its architecture, decoration, 
and furnishing. Among things deserving special 
mention, it was here that the first passenger-elevator 
in the world was erected (" Tuft's vertical railway "), 
and shortly succeeded in the same place by a later 
one by the same inventor. A noted writer says of 
the Fifth Avenue : " It is unequaled in the number 
and spaciousness of its corridors, halls, and public 
rooms, and the commodious character of its guest- 
rooms. Beginning with the Prince of Wales in i860, 
a never-ending procession of the great men of this 
and other countries has marched through its corri- 
dors. No other single hotel in the world has ever 
entertained so many distinguished people as have 
been received at the Fifth Avenue — Presidents of 
the United States, United States Senators, Con- 
gressmen, governors, judges, generals, admirals, em- 
perors, princes, foreign ambassadors, untitled men 
and women of renown ; the list would fill a volume. 
The London ' Times,' in speaking of the gathering 
at Grant's funeral in 1885, said that it was the most 
noted assembly of distinguished Americans ever 
brought together; and the same description would 
apply to many another occasion there. Through- 
out its entire career it has been identified with the 
most notable and brilliant local and national events 
of the generation." In i86o the Continental Hotel, 
Philadelphia, similar in many respects to the Fifth 
Avenue, was opened under the auspices of Mr. 
Stevens, and has had an eminent career. The out- 
break of the Civil War (1861) found Willard's Hotel, 
Washington, the very focus of thrilling scenes and 
events that in intensity have had scarcely a parallel 

Hiram Hitchcock. 



in American annals. The Lindell Hotel, St. Louis, 
was opened in 1863, and the Southern Hotel in the 
same city in 1865. They have since been destroyed 
by fire, and rebuilt and reopened on a larger scale 
than before. The opening of the Albemarle, Hoff- 
man, St. James, and Grand, all in New York, came 
within this half-decade. The Arlington, Washing- 
ton, was opened in 1869, has been recently greatly 
enlarged, and is the present hotel center of the 
national capital. The Gilsey House, New York, 
was opened in 1871, and at once took the first rank 
among houses on the European plan. In 1873 the 
Windsor Hotel, New York, commenced its success- 
ful business career, and at about that date the Buck- 
ingham also opened. In 1874 the Brunswick was 
opened in Boston. At this time the large and at- 
tractive hotels of Chicago, the Palmer House and 
the Grand Pacific, were deserving their enormous 

The year 1875 is noted for the opening of the 
" largest and most magnificent structure ever dedi- 
cated to the needs of the traveling public," the Pal- 
ace Hotel, San Francisco. The immensity of the 
building as a whole ; the grand court, a vast amphi- 
theater as it were, occupying 12,000 square feet of 
surface, with its charming accessories, sheltered by a 
roof of nearly 150 feet elevation ; the immense pala- 
tial apartments for various functions, in such admi- 
rable arrangement and effect ; and the roominess, 
comfort, and convenience of the private apartments, 
all conspire to make this hotel justly preeminent. 

In the last two decades of the century there has 
been an uprising, as it were, — those that lacked the 
earth seeking the sky, — of splendid hotels, as well as 
an enlarging and beautifying of those already built, 
all over the land — from the Vendome and Young's at 
Boston ; the Narragansett at Providence ; the Grand 
Union, Park Avenue, and Murray Hill at New 
York ; the Lafayette and Stratford at Philadelphia ; 
the Rennert at Baltimore ; the De Soto at Savannah ; 
the Kimball at Atlanta ; the Iroquois at Buffalo ; the 
Hollenden at Cleveland ; the Grand at Cincinnati ; 
the Cadillac and Russell at Detroit ; those almost 
without number, including the grand Auditorium, at 
Chicago ; the Plankinton at Milwaukee ; the Ryan 
at St. Paul; the West at MinneapoHs; the Coates 
House at Kansas City; across the plains to the 
Brown Palace Hotel at Denver; "over the range" 
to the great houses of the Pacific ; away north to the 
Portland at Portland, Ore., with its accommodations 
for a thousand guests ; and beyond to the Tacoma 
at Tacoma, Wash. In this brief article outlining the 
growth of the hotel business it is impossible to name 

all of the houses worthy of mention. It should be 
remembered that there are less pretentious houses 
that are special types of excellence, each in its way, 
in nearly all the large cities; for example, the Sin- 
clair, Continental, and Ashland in New York. There 
are large houses poorly managed; and also small 
houses scattered throughout the country whose 
names are synonymous with real comfort. Within 
the last few years the Plaza, Imperial, Savoy, Hol- 
land, Waldorf, Netherland, and Majestic, all splen- 
did hotels, have opened in succession in New York. 
The Waldorf, when its proposed extension is com- 
pleted, will outrank all in size, if not in magnificence. 
Of these last creations an enthusiastic writer says: 
"Tessellated pavements, marble columns, groined, 
fluted, and quartered ceilings, veneerings of precious 
stones, statuary and paintings, Pompeian conceits in 
color and subject, tapestries superb enough for an 
Oriental queen, and a glitter of gold and silver and 
crystal, are all baptized in a flood of delicate colors, 
as a thousand jets of flame glow softly through col- 
ored glass, and flash their splendors through over- 
hanging pendants and candelabra." As we are 
closing this paper the Jefferson at Richmond, con- 
sidered by those who have seen it to be the loveliest 
of all, is opening its ample portals to " fair Virginia " 
and the world. 

The watering-place hotels are a very distinctive, 
important, attractive, and rapidly increasing part of 
the business, and are of grades to suit all tastes and 
purses. In 1795 there were ordinary country tav- 
erns at Saratoga, Ballston, and at some of the Vir- 
ginia springs. The first tavern at the White Moun- 
tains was built by Crawford in 1803, and "sheltered 
the scattering tourists." The Catskill Mountain 
House was built in 1822. At that date there was 
no tavern at Sharon, and only very primitive ones 
at Niagara and Rockaway ; but by 1 840 these were 
improved and houses were opened at Trenton Falls 
and the Delaware Water Gap. Twenty years later 
(i860) there were large hotels at Newport, Nahant, 
the White Mountains, Saratoga, Lake George, Niag- 
ara, Cape May, Old Point Comfort, and at the Vir- 
ginia springs ; but it was not yet customary for great 
numbers of our active population to " go away " in 
summer for relaxation, nor to indulge the taste for 
natural scenery. Long Island was almost a terra 
incognita, the beauties of the Adirondacks were un- 
discovered, the coast of Maine unexplored, and the 
Rocky Mountains seemed an eternal barrier between 
the Atlantic and the Pacific. But now in summer, 
with conditions of greater wealth and leisure, the 
whole world appears to be traveling. Great hotels 



Stand out as sentinels at the Isles of Shoals and Block 
Island ; and others have arisen as by magic — from 
the great houses on the northeastern coast, and on 
Long Island, where scores of thousands go daily, 
and along the Jersey shore, where their number is 
legion, away down to the Princess Anne at Virginia 
Beach. At Jekyll Island the scene is renewed, cul- 
minating in Florida in that remarkably beautiful ex- 
ample of Spanish architecture, the Ponce de Leon, 
in the Royal Ponciana, and in the grand Tampa 
Bay. So numerous and resplendent are our seaside 
resorts that yachtsmen cruising along our eastern 
shores in summer are ever in view of the sheen of 
their hundred lights. But even these palaces are ex- 
celled on the Pacific by the perfection and liberality 
of the appointments of the Del Monte at Monterey, 
"in the center of a beautiful garden — the finest, the 
most gorgeous, the richest, the most varied in all the 
world ; " and by the splendid Hotel del Coronado at 
Coronado Beach, covering nearly eight acres. In 
the interior of the country, at the springs, — Poland, 
Saratoga, Sharon, Richfield, all through Virginia, 
Waukesha, and Hot Springs, Ark., — there are vast 
establishments which are thronged in the " season " 
with health and pleasure seekers. The many inland 
lakes and the rivers are bordered with summer hotels, 
of which the Champlain is most "beautiful for 
situation." Sunny skies are at Lakewood, and over 
Aiken and the Bon Air in the midland South; and 
the White Mountains, the Adirondacks, the Cats- 
kills, the unique resorts of the Shawangunk range, 
the great Appalachian chain away down into North 
Carolina, are alive with hotels that illumine the night 
with lights that cluster into beacon-fires. In the 
Rocky Mountains — the great continental range, so 
vast in its scenes of grandeiu", of beauty, and of 
charm — there is many a fine house at spring and on 

In many parts of the country, when railroads were 
first built, and long afterward, the hotels at the sta- 
tions, in their imitation of city houses, were vastly in- 
ferior to the old taverns along the public highways. 
In later years some of the great railway lines across 
the sparsely settled continent have rendered the trav- 
eling public a real service in opening and managing 
hotels of merit. In some marked instances houses 
of great magnitude and cost have been erected far in 
advance of population, to aid in the opening of vast 
tracts of land and the building up of railway systems. 

Much might be said, did space permit, of historic 
rooms in American hotels : the colonial dining-room 
of Governor Langdon at the Rockingham ; " P " at 
the St. Charles ; Daniel Webster's room at the Astor ; 

the famous " D. R." at the Fifth Avenue, and others 
of similar interest. One could dwell with interest, 
also, upon long terms of management, like that of 
the Cataract at Niagara, which has been in the same 
family for three generations, and Downer's Tavern 
in Vermont, which he has kept for fifty-three years. 

The American plan — a fixed price per day, includ- 
ing room, meals, and service — generally prevails at 
the watering-places, and to a considerable extent in 
the cities and towns ; but the European plan, which 
is of comparatively recent introduction, — a special 
price for each room and for each item on the bill 
of fare and for service, — has come to be very largely 
patronized in the cities. In some instances both 
plans are combined. The practice of tipping has 
greatly increased with the introduction of the Eu- 
ropean plan, and also liveries and coats of arms 
have in some cases been introduced. There are 
hotels for all conditions and nationalities of men, 
and at all prices, from that of a plain room off from 
the great thoroughfares, and of meals where they 
serve " ten thousand a day at an average of thirty 
cents " (in the manner of Pattinson and Sweeny in 
1832), up to princely apartments where every dish 
means dollars and every tap of the bell a pour-boire. 
The different departments of trade and commerce 
and their representative commercial travelers are 
catered to, as well as tourists and men in public life, 
as are also the various clubs and associations of 
gentlemen and of ladies. The charges of the best 
hotels now are about twice those of the correspond- 
ing class in 1850. It may be said in passing that 
the modern apartment-house or flat has lessened 
somewhat the need for private houses, but has not 
met the requirements of a "travelers' home." In 
the general prosperity, as large fortunes have been 
created and the number of persons of wealth and 
leisure has multiplied and travel extended, the re- 
quirements and wishes of many patrons of hotels 
have increased in a most marked degree ; and at 
times nothing seems too lavish, sumptuous, and 
palatial for the novelty of the hour. Yet the great 
majority of patrons seek those "home comforts" 
which gratify refined taste and leave no tinge of care. 

During the century great changes and improve- 
ments have been made in hotel construction, ap- 
pointments, and management. We now have run- 
ning water with set basins, water-closets and baths 
with exposed plumbing, open grates and steam-heat, 
improved ventilation, more numerous stairways, fire- 
escapes, fire-proofing, elevators for passengers and 
baggage, electric bells, and telephones ; and the 
laundry and other machinery which was the wonder 



of the Astor in 1836 was primitive compared with 
that of to-day. There are now single hotel struc- 
tures that are valued at three or four million dollars 
and rented for one fifth of a million. The com- 
plete furnishing represents an outlay of several hun- 
dred thousand dollars, in which variation in style, re- 
production of old patterns, special designs in china, 
glass, etc., carpets and hangings, pictures, bric-cl-brac 
and gilding, with elaborate fixtures and decorations, 
all conspire to rival a palace in a golden age. The 
industrial arts and appHances have fairly reveled in 
hotels ; utensils and machinery have multiplied ; oil 
and candles have been succeeded by gas, and that 
by electric light, with (in some cases) its special 
plant ; water is sometimes distilled on the premises, 
and the ice-machine is at times the companion of 
the many wonderful preservative and economical 
results of cold storage. Among the now necessary 
conveniences and adjuncts are reading, writing, and 
music rooms, coat, package, baggage, and boot 
rooms, barber-shop, billiard-room, church directories, 
railway and steamship announcements, telegraph, 
telephone, and various ticket offices, book and news 
stands, stenography and type-writing, and carriage 
and messenger service. 

The general purveying for a great hotel is most 
varied and important. For the table alone the 
markets of the entire world contribute their many 
and choicest foods, nectars, and spices, which are 
placed in stores representing scores of thousands of 
dollars in value. The cuisine, of infinite variety, 
has perhaps attained the highest possibiHty in gastro- 
nomic art; and the almost hourly service, at times 
enlivened by music, approaches perfection. The 
fastidious guest, with ever-developing tastes, requires 
all that the world can provide, and the most con- 
stant and immediate attention. The host, in turn, 
by his alluring and tempting novelties, creates a 
demand for newer luxuries ; and daily a feast is 
spread of viands so delectable that a Lucullus might 

The hotel business has grown to enormous pro- 
portions, its growth stimulated recently by million- 
aires of other occupations who have erected palatial 
houses regardless of cost. It is impossible to give 
correct statistics and financial results, and any at- 
tempt to do so would be unwise and misleading. 
Under favorable conditions houses prosper; but at 
present, in most of the large cities, the supply of first- 
class houses exceeds the demand. 

There is no business more complex and exacting 
in details, or that requires greater ability in manage- 
ment. The proprietor has " all sorts and conditions 

of men " to deal with ; he must know human nature 
in its varied phases ; and he must solve race and class 
problems with delicate tact. He must have a fair 
knowledge and conception of trade, and of every- 
thing that meets and supplements the wants and 
desires of mankind. In all this he is a helpful factor 
in the commerce and industries of the world. He is 
aided in caring for hundreds of guests by the several 
important heads of departments, from the clerk who 
receives the guest, through all the intricate working 
of the establishment, to the head porter who gives 
the final sign of departure ; and by (in some cases) 
several hundred servants, including skilled artisans 
engaged in manufacture and repair. Too much can 
never be said of the aid, influence, and encourage- 
ment of woman, from time immemorial, in bringing 
to pass splendid successes; and there are rare in- 
tances in the hotel business of her sole management, 
such as furnished by Mrs. Alvord's most excellent 
houses in Colorado. The local and State hotel asso- 
ciations (originating in New York) and the Hotel 
Men's Mutual Benefit Association are of great ad- 
vantage to the business in many ways ; the newspa- 
pers and magazines published in the interest of hotels 
are able and influential; and the publications en- 
titled " Hotel Red Book " and " Where to Stop " 
are of much value. On the other hand, the busi- 
ness is greatly hampered by legal restraints, is sub- 
ject to the whims of legislation, and is a sufferer from 
pilfering thieves. 

The hfe of the host is one of constant watchfulness. 
His responsibilities for and in behalf of his guests 
are as continuous for the full twenty-four hours of 
each and every day as the swinging of his ever-open 
doors. He is responsible always for the safety, 
oftentimes for the respectability and conduct, and 
constantly for the comfort of his household. To 
his guest he has the opportunity of being a friend 
and a guide. He makes him feel " at home," is his 
banker, tells him of the shops, galleries, churches, 
libraries, places of interest and amusement, and in- 
forms him of forthcoming events and routes of 
travel. He is ever ready in fehcitation and always 
at hand in the hour of trial. He calls in the coun- 
sel, goes on the bond, witnesses the will, summons 
the physician and the clergyman, and aids in the 
last sad rites. It is not strange, therefore, that the 
realized hope of Archbishop Leighton was that he 
might die at an inn. 

The taverns of 1795 were the "fountains of 
news." The hotels of to-day are closely related to 
the public welfare ; statesmen and men of affairs 
meet in them to consider the public weal and for- 



mulate policies of state ; and in the hour of national 
peril or elation it is to the center of public sentiment, 
the hotel, that the citizen goes for the latest infor- 
mation and the truest measure of the pubhc mind. 
And in the presence of great events the host is a 
not unimportant factor, and with the historian of 
old he can say, " All of which I saw, and a part of 
which I was." 

In the future it is hoped that proprietor and guest 
will take serious counsel together, and that faulty and 
mixed architecture and florid and meaningless deco- 
ration and furnishing may be avoided, and correct 
taste and practical methods followed. Health and 
cleanliness are of the first consideration. A hotel 

should occupy ample space and not be uncomfor- 
table in elevation. The plumbing, ventilation, and 
sanitary arrangements should be perfect. A hotel 
contains a large and daily changing population from 
all places under the sun, and as far as possible all 
wall-stuffs and hangings, those pestilential resorts of 
disease-germs, should be avoided. Safety, respecta- 
bility, and comfort are the three hotel graces ; all else, 
in comparison, is "sounding brass and a tinkling 
cymbal." In this spirit the host will stand at the 
gateway of commerce and welcome all her votaries 
on their journey. 

" The world 's an inn, and death the journey's end." 


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IN order to convey to the reader a fair under- 
standing of the progress of the American 
theater since 1795 it is perhaps necessary to 
state something about its beginnings, which, in- 
deed, previous to 1750, are involved in much ob- 
scurity. Tony Aston, an English stroller of some 
celebrity, visited the Southern and Middle colonies 
about 1730, and gave entertainments at New York 
and perhaps other places ; and there is some evidence 
that a company of comedians acted plays in New 
York in 1732; but it was not until 1749 that an 
organization came into existence of which we can 
form any definite judgment. This company at- 
tempted to open a playhouse in Philadelphia, and 
Addison's " Cato " was actually performed ; but the 
performers were arrested and admonished by Re- 
corder Allen to give up the undertaking. Thomas 
Kean was the principal actor in both tragedy and 
comedy, and one Murray seems to have been asso- 
ciated with him in the management. Finding Phil- 
adelphia too inhospitable, the players went to New 
York, where they were advertised as the company 
of comedians from Philadelphia, and gave the first 
theatrical season of which we have any connected 
account. The performances were given in a " con- 
venient room " in a house belonging to Rip Van 
Dam in Nassau Street, and extended over a period 
of more than a year — from March 5, 1 750, to July 8, 
1751. The first play was " Richard III.," in which 
Kean played Richard. So far as is known, the 
company appeared in fifteen plays and nine farces. 
Although Mr. Kean formally announced his with- 
drawal from the stage to resume his business of writ- 
ing, he was with a company called the " Virginia 
Comedians" at Annapolis in the summer of 1752, 
when Lewis Hallam and his London players arrived 
at Williamsburg, Va. Besides Mr. Kean there were 
other members of the New York company among 
these " Virginia Comedians." Perhaps this disposes 

of the claim usually made for Hallam's company 
as being the first regular theatrical organization in 

Lewis Hallam, who brought a company of come- 
dians from London in 1752, was not an actor of any 
consequence in England, nor is it likely that his wife, 
known to the American stage successively as Mrs. 
Hallam and Mrs. Douglass, was an actress of recog- 
nized ability there. William Hallam, who is reported 
to have furnished the money for the American 
venture, was not the manager of the theater in 
Goodman's Fields where Garrick made his d^but, 
but of a theater of no importance or reputation at 
the Wells in Lemon Street, Goodman's Fields. It 
was at this house that Mrs. Hallam, the wife of 
Lewis, played leading parts between 1746 and 1751. 
In the latter year she had a benefit at which she 
played Desdemona, with her husband, Lewis Hallam, 
as Roderigo. At the time of this benefit the Amer- 
ican venture was in preparation, and one Robert 
Upton was sent to New York to prepare for the 
coming of the players. He proved false to his 
trust, and attempted to estabhsh a theater on his 
own account, but met with little encouragement and 
had disappeared before the Hallams came to Vir- 

The Hallam company reached Yorktown in June, 
1752, and began playing at Williamsbiirg on the 5th 
of September following, the opening pieces being 
" The Merchant of Venice " and " Lethe." The only 
other play the Hallam company is known to have 
performed at Williamsburg was " Othello," November 
9, 1752. From Williamsburg Hallam went to New 
York, where he arrived in June, 1753, just one year 
after the arrival at Yorktown. The New York sea- 
son lasted from September 17, 1753, until March 
18, 1754. Mrs. Hallam played the leading parts 
in both tragedy and comedy, while her daughter. 
Miss Hallam, was put forward in farces. Hallam 




seldom appeared. The great Shakespeare rdles 
were divided between M alone and Rigby, the former 
playing Shylock and Lear, and the latter Richard 
and Romeo. From New York the company went 
to Philadelphia, where the engagement was limited 
to twenty-four performances and one night for the 
benefit of the poor. The season began April 15, 
1 7 54, and closed in June. This ended the theatrical 
campaign of Lewis Hallam the elder, who retired 
with his family to Jamaica, where he died soon 

A year or two after Mr, Hallam's death his widow 
married David Douglass, who organized a theatrical 
company in Jamaica in 1758 for another American 
campaign, with Mrs. Douglass as his chief attraction. 
Besides his mother, young Lewis Hallam was the 
only member of Mr. Douglass's company who had 
previously appeared in the New York and Philadel- 
phia theaters. He had already become a full-fledged 
tragedian, although he was only in his twentieth 
year, sharing the leading parts in tragedy and 
comedy with Mr. Harman, as Rigby had previously 
shared them with Malone. Mrs. Harman, who was 
a daughter of Charlotte Charke and a granddaughter 
of CoUey Gibber, was also with the company, and 
next in consequence to Mrs. Douglass. The low 
comedian was Owen Morris, who was identified 
with the American theater for a full half-century — 
1759— 1809. After his arrival in New York, Doug- 
lass had much difficulty in obtaining permission to 
open the theater that he had built on what was called 
Cruger's Wharf, and it was not until December 28, 
1758, that he began his season with the tragedy of 
"Jane Shore." The season was a very brief one, 
closing February 7, 1759. 

During the following spring and summer Mr. 
Douglass built a theater at Vernon and Smith streets, 
in Philadelphia, which he opened June 25, 1759, 
and maintained with considerable regularity until the 
close of the year. He had obtained authority to 
act from Governor Denny, and the compact was 
kept, although the opposition to the theater was so 
great in the province that an act prohibiting plays 
was passed by the Assembly to go into effect Janu- 
ary I, 1760. After Philadelphia was closed against 
him, Mr. Douglass went to Annapolis, where he 
played an engagement extending from March 3 to 
May 12, 1760. The company also performed in 
other Maryland towns, and then invaded Rhode 
Island, playing engagements at Newport and Provi- 
dence in 1 76 1. In the autumn Mr. Douglass built 
another theater in New York, in what was then 
Chapel (now Beekman) Street, where he gave per- 

formances from November 19, 1761, to April 26, 
1762. This ended his first attempt to achieve the 
mastery of the colonial stage. In his few years of 
management Douglass had become an actor of con- 
siderable authority, attempting such parts as Sir John 
Falstaff in " King Henry IV.," and Mercutip in 
" Romeo and Juliet." In the latter young Hallam 
played the lover to his mother's Juliet. In the last 
New York engagement, Mrs. Hallam, the wife of the 
youthful tragedian, was seen in a few parts, but the 
pair separated soon afterward. 

It has always been understood that after his retire- 
ment from New York, in 1762, Mr. Douglass did 
not venture upon the continent again until 1766, 
when he built the Southwark Theater in Philadelphia. 
On the contrary, he appeared in Charleston in No- 
vember, 1765, and remained there until the follow- 
ing April, Lewis Hallam was not with the com- 
pany, and, with the exception of Mrs. Douglass and 
Miss Hallam, the performers were all new to the 
stage. Only three of the new players were still with 
Douglass when he reached Philadelphia — Messrs. 
Woolls and Wall and Miss Wainwright. With the 
opening of the new theater in Southwark, Philadel- 
phia, began the theatrical organization afterward 
known as the " Old American Company." Lewis 
Hallam was once more in the lead. Mr. Morris 
and Mrs. Harman were again with the company. 
On the opening night Miss Cheer appeared as 
Katherine in " Katherine and Petruchio," and sub- 
sequently succeeded to most of the parts previously 
filled by Mrs. Douglass. Mr. Woolls and Miss 
Wainwright were the principal singers. During this 
season a so-called comic opera, "The Disappoint- 
ment," said to have been written by Colonel Thomas 
Forrest, afterward a distinguished officer in the 
Revolutionary army, was announced for production, 
but it was withdrawn because it contained "local 
reflections." As a recompense for its withdrawal, 
" The Prince of Parthia," by Thomas Godfrey, Jr., 
was produced April 24, 1767. This was the first 
tragedy written and played in America. The season 
lasted from November 21, 1766, to July 6, 1767, 
and was followed by a supplementary season of 
two months, September 24 to November 23, 1767. 
The latter was noteworthy for the first appearance 
in America of John Henry, who was the partner of 
Lewis Hallam after the Revolution in the manage- 
ment of the Old American Company. 

While the company was playing in Philadelphia, 
Mr. Douglass built a new theater in John Street, 
New York, which was the second of the permanent 
theaters in the colonies, the Southwark being the 



first. The first season at the John Street house 
lasted from December 7, 1767, to July 2, 1768. 
The company alternated between these two theaters 
down to the time of the Revolution ; but Mr. Doug- 
lass found the patronage of the two cities inadequate 
as early as 1770-71. In the latter year he made a 
tour to the southward as far as Williamsburg, Va., 
playing at Fredericksburg, SuflFolk, and other towns, 
and building a theater at Annapolis, where the 
company played an engagement in the autumn of 
1 77 1. In 1773 Douglass also built a theater at 
Charleston, S. C, which was the last of the many 
buildings he erected for theatrical purposes between 
1758 and 1774. The company played at Charles- 
ton from December 22, 1773, to May ig, 1774. It 
was the manager's intention to reopen the New 
York theater in the autumn, and Mr. Hallam em- 
barked for England from Charleston for the purpose 
of engaging recruits for the company ; but in Octo- 
ber the Continental Congress passed a resolution 
forbidding theatrical performances, in view of the 
impending Revolution, and the organization was 
disbanded. Hallam remained in England, where 
he appealed to the London public at Covent Garden 
Theater as Hamlet in 1775. His mother, Mrs. 
Douglass, died in Philadelphia at the close of 1774, 
and Mr. Douglass returned to Jamaica, where he 
became a magistrate. 

It is an interesting fact, showing the theatrical 
activity before the Revolution, that while the Amer- 
ican Company was acting in New York and Phila- 
delphia in 1766-69 there was a company in the 
South giving performances at Annapolis and Wil- 
liamsburg. This company was known as the " Vir- 
ginia Comedians" in 1768, when it gave a long 
season at the Virginia capital ; but it assumed the 
name of the " New American Company " when it 
was at Annapolis from January to June, 1769. 
The leading spirits of the Virginia Comedians were 
Messrs. Verling and Bromadge, and Mrs. Osborne, 
who had played with Douglass at Charleston in 
1765-66, and Mr. Godwin, who was with the Amer- 
ican Company at the Southwark in Philadelphia in 
1766-67. All these were with the New American 
Company, with the exception of Mr. Bromadge. 
A number of bills of the Virginia Comedians at 
Williamsburg in 1768 have been preserved. 

The most important annals relating to the Amer- 
ican stage that have escaped the destroying hand of 
time are a collection of playbills made by Thomas 
Llewellyn Lechmere Wall — Mr. Wall of Douglass's 
company. These cover forty years of the theatrical 
life of the actor, and are especially valuable for the 

complete information they afford in regard to the 
Baltimore Company, organized by Wall and Lindsay 
in 1782. Wall was perhaps the only member of the 
American Company who remained behind when 
Douglass returned to Jamaica in 1774. He was 
also the only manager who undertook to produce 
plays before the close of the Revolution. In 1781 
he was at Annapolis giving entertainments with the 
assistance of his wife and daughter when the French 
army was on the march to Yorktown. For one of 
his performances at that time he succeeded in secur- 
ing the services of the band belonging to the regi- 
ment of Count de Chaleur. Later in the year he 
went to Baltimore, where he repeated his Annapolis 
entertainments, and in conjunction with Adam 
Lindsay, a tavern keeper at Fell's Point, built a 
theater, of which Lindsay and Wall were the nom- 
inal managers, with Wall as the stage director. The 
company was formed on what was afterward known 
as the "commonwealth plan." The theater was 
opened January 15, 1782, and continued open with- 
out important interruptions until the 9th of July — 
forty-two nights. In all nineteen plays and fourteen 
farces were produced, and the total receipts for the 
season were ^^2841 17^. 5^/., an average of ^69 
55-. I od. per night. With the exception of the Walls 
the players were all new to the American stage, and, 
it may be assumed, were all amateiu-s. 

The second season at the Baltimore theater ex- 
tended from September 13, 1782, to February 7, 
1783 ; but the house was closed from October 18 to 
November 15, 1782, when the company was at 
Annapolis. The receipts for ten nights at Baltimore 
were ^^896 6j. 7^/., an average of ;^89 12^. 6^.; 
and for seven nights at Annapolis, ^^688 2j. 7^., an 
average of ;^98 6j. \d. On the third night of the 
season at Baltimore, Mr. and Mrs. Dennis Ryan 
appeared in " Douglass," the former as Young Ner- 
val and the latter as Lady Randolph. Ryan domi- 
nated the company from the outset, and when Wall 
retired from the management, February 7, 1783, he 
assumed the reins, keeping the theater open from 
February nth to June 9th. From Baltimore Ryan 
carried his company to New York and opened the 
theater in John Street, June 19th, keeping it open 
until August 16, 1783, although the city was still 
in the occupation of the British. Wall was with 
Ryan's company, which remained until the evacua- 
tion, giving two performances in October, 1783 
while the military players gave a performance for 
Mrs. Ryan's benefit. In the winter Ryan again 
opened the Baltimore theater, the season extending 
from December 7, 1783, to February 14, 1784. 



The only noteworthy event of this season was the 
first production of the "School for Scandal" in 
America, February 3, 1784, with Mrs. Ryan as 
Lady Teazle. After the close of the Baltimore season 
in 1 784, Ryan took the company to Richmond, where 
he played a long engagement. Mr. Heard, who 
was the original Sir Peter Teazle in this country, 
joined the forces of Hallam and Henry, while other 
members of the organization found professional 
employment in the South during the rest of the 

After the Revolution both Lewis Hallam and 
John Henry sought to control the theaters that had 
been built by Douglass ; but Hallam was the first to 
present a company of comedians to the New York 
public, opening the John Street Theater August 24, 
1785. None of his players had ever appeared 
under Douglass's management. The Old American 
Company had passed into Henry's control in Jamai- 
ca, and while Hallam and his feeble forces were 
playing their New York engagement Henry arrived 
with a number of the old favorites, ready to renew 
operations in the United States. The company in- 
cluded Mrs. Henry, — previously known to theater 
goers as Miss Maria Storer, — Mr. and Mrs. Morris, 
and Mr. WooUs. Besides these were Thomas Wig- 
nell, an excellent low comedian, afterward one of 
the managers of the New Theater in Philadelphia, 
and Miss Tuke, who subsequently became Mrs. 
Hallam. Confronted by the returning players, 
Hallam proposed a partnership with Henry, and the 
firm of Hallam & Henry, which ruled the American 
stage during the next seven years, came into exis- 
tence. The John Street Theater reopened under 
their management, November 21, 1785. This 
company played alternately in New York and 
Philadelphia, with an occasional visit to Baltimore 
and Annapolis, without any important changes 
in its composition until 1792, when Wignell se- 
ceded, carrying with him Mr. and Mrs. Morris. 
Hallam had agreed to send Wignell to England to 
engage recruits, but it was afterward determined 
that Henry should go instead. The quarrel that 
resulted was very bitter, but its final consequence 
was the establishment of the theater in America on 
new foundations. Henry engaged a number of 
capable actors and actresses whose names are part 
of the history of the American stage, while Wignell 
not only succeeded in building in Philadelphia the 
first really handsome and complete theater in the 
United States, but put into it the best company of 
players that had as yet been tempted to cross the 

The only incident of the Hallam and Henry 
partnership, previous to the reorganization of the 
company, that needs to be noted here is the produc- 
tion of the first American comedy, " The Contrast," 
by Royall Tyler. This piece, which was first pro- 
duced in New York April 18, 1787, was written for 
Wignell, who wished to play a Yankee character. 
Wignell's Jonathan deserves remembrance as the 
forerunner of the long series of stage Yankees that 
afterward became popular with American audiences. 
The comedy was printed in Philadelphia, and was 
often played by strolling companies before the close 
of the century. 

The only really important recruits engaged by 
Mr. Henry in England were Mr. and Mrs. Hodg- 
kinson, of the Bath and Bristol theaters, and Mrs. 
Wrighten, who had long been a favorite singer and 
actress at Drury Lane. Hodgkinson was a man of 
great talent and versatility, and the best actor seen 
in America up to that time and for many years 
afterward. He made his d^but as Don Felix in 
"The Wonder," at Philadelphia, September 26, 
1792, succeeded Henry as one of the managers of 
the Old American Company in 1 794, and was active 
as actor and manager in New York until after the 
opening season at the New Theater in 1798. Mrs. 
Hodgkinson, known at Bath and Bristol as Miss 
Brett, was an actress of merit, and in this country 
eclipsed both Mrs. Henry and Mrs. Hallam, the 
wives of the managers by whom the Hodgkinsons 
were engaged. Mrs. Wrighten was known in 
America as Mrs. Pownall. She died at Charleston 
in 1796, after introducing her two daughters to the 
stage in this country. One of them, Caroline, mar- 
ried Alexander Placide, who had been a rope dancer 
in England. She was the mother of the famous 
Placide family of actors. It was during this period 
that William Dunlap became prominent as a dram- 
atist and adapter of plays. His first comedy, " The 
Father," was produced at the old John Street 
Theater, September 7, 1789. Dunlap became as- 
sociated with Hallam and Hodgkinson in the man- 
agement of the New York company in 1796, and 
he was afterward for a brief period the sole manager 
of the New Theater, better known as the Park. 

After leaving the Old American Company, in the 
beginning of 1792, Thomas Wignell associated him- 
self with A. Reinagle, a musician who came to 
America in 1786, in the project of building the New 
Theater in Philadelphia, afterward known as the 
Chestnut Street Theater. The house was modeled 
after the theater at Bath, and was completed early 
in 1793 ; but owing to the yellow-fever epidemic it 

Albert M. Palmer. 



was not opened by the company of players engaged 
by Wignell until February 17, 1794. Among the 
actors and actresses comprising the Philadelphia 
company were Mr. Fennell, a young tragedian of 
much promise ; Mr. and Mrs. Whitlock, the latter a 
sister of Mrs. Siddons ; and Miss George, who was 
the wife of Sir John Oldmixon, and was known to 
our stage as Mrs. Oldmixon. This company re- 
mained intact without any important changes or 
additions for three years, playing alternately in 
Philadelphia and Baltimore, with an occasional visit 
to Annapolis; but in the autumn of 1796 Mr. Wig- 
nell brought three important recruits from England 
— Mrs. Merry, the famous Miss Brunton of Covent 
Garden Theater, who had become the wife of 
Robert Merry, the Delia Cruscan poet; Thomas 
Althorpe Cooper, then a young man of twenty, but 
destined to be the manager of the New York 
theater for many years ; and William Warren, who 
had been a stroUing player in England, and who 
became the successor of Wignell in the management 
of the Philadelphia theater. Mrs. Merry became 
a widow in 1798. She soon afterward married 
Wignell, and after his death she became the wife of 
Warren, who survived her many years. 

A fortnight before the formal opening of the 
Philadelphia theater by Wignell's company a new 
theater in Boston, scarcely inferior to the Philadel- 
phia house, was opened by an English company 
engaged and brought over by Charles Powell. This 
theater was in Federal Street, and was built by sub- 
scription. It was destroyed by fire in 1798. Pow- 
ell's company was a feeble one, and he was com- 
pelled to relinquish the management upon the close 
of his second season in 1 795. Powell was succeeded 
by Colonel John S. Tyler, a brother of Royall Tyler, 
the author of "The Contrast," who managed the 
house on behalf of the stockholders from January to 
May, 1796. The season proved a failure; but the 
theater was reopened in September by John Brown 
Williamson, an English actor, whose wife was pop- 
ular in London as Miss Fontenelle ; but neither he 
nor his wife, nor a stronger company than had as 
yet been seen in Boston, availed to make the season 
successful. One reason for this was that a new 
theater, known as the Haymarket, had been built 
through the exertions of Charles Powell, and opened 
by him for the first time December 26, 1 796. Among 
Powell's English recruits for the Boston Haymarket 
were Mr. and Mrs. Giles L. Barrett, the parents of 
the famous New York comedian, George H. Barrett ; 
Mr. and Mrs. Simpson, afterward New York favor- 
ites ; and Mrs. Simpson's three daughters, the Misses 

Westray, of whom Juliana became Mrs. William B. 
Wood ; Eliza, successively, Mrs. Villiers and Mrs. 
Twaits ; and Ellen, Mrs. Darley. Powell again failed 
at the Haymarket, and the house passed into the 
control of Hodgkinson, Hallam, and Dunlap, under 
the personal direction of Hodgkinson. The New 
York company occupied it in the summer of 1797, 
after which it was abandoned. The Haymarket de- 
serves to be remembered for the production of two 
American war plays — " Bunker Hill," by John Daly 
Burke, February 20, 1797; and "West Point Pre- 
served," the first of the Andre pieces, by William 
Brown, on the 17th of April following. Dunlap's 
" Andre " was not produced in New York until 
March 30, 1798. 

This epoch, 1792-98, was also remarkable for 
theatrical activity in the South. Not only had the 
Baltimore company, including Mr. and Mrs. Ryan 
and Mr. Wall, played a long engagement at Rich- 
mond as early as 1784, but in 1790 John Bignall 
and Thomas Ward West were the managers of a 
company called the "Virginia Comedians." This 
organization maintained its existence for many 
years, its circuit extending from Richmond and 
Norfolk to Charleston. Bignall, who was held by 
his Southern admirers to be the best actor on the 
continent, died in 1794. His real name was Money- 
penny, and he had been a stroller in England in the 
same company with William Warren, of the Phila- 
delphia theater. After Bignall's death West became 
the sole manager of the company, and piloted it 
over the Southern circuit for a number of years. In 
1795 there was a rival theater in Charleston, con- 
ducted by Mr. Jones, who had been previously at 
the Boston Theater. His principal actress was Mrs. 
Whitlock, who had just retired from the Philadelphia 
company. A Frenchman, Mr. Sollee, succeeded to 
the management of this theater, and organized a 
company in Boston to play in Charleston for the 
season of 1 795-96. Mr. and Mrs. Whidock, Mr. and 
Mrs. Placide, and Mrs. Arnold — afterward Mrs. Poe 
and the mother of Edgar Allan Poe — were in the 

The prosperity which had given to America three 
splendid theaters within five years — the Chestnut 
Street in Philadelphia, the Park in New York, and 
the Boston Theater in Federal Street, Boston, rebuilt 
immediately after its destruction in 1798 — was fol- 
lowed by a period of depression that was severely 
felt over all the country. At the close of the century 
Wignell was in jail for debts incurred through the 
Philadelphia theater, and Dunlap, who had under- 
taken the sole management of the New York theater 



to retrieve previous losses in New York and New 
England, lost his entire private fortune in the ven- 
ture. Mr. Barrett was induced to undertake the 
management of the new Boston Theater in 1799, 
but he failed dismally. 

In all these cities theatrical enterprises were ex- 
perimental for several years, but in every case a man- 
ager was finally found in the local company who suc- 
ceeded in placing the theater on a sound business and 
artistic basis. Mr. Warren, after he became Wig- 
nell's successor in Philadelphia, associated with him- 
self in the direction of the Chestnut Street Theater 
a popular young member of the company, William 
Burke Wood. This partnership lasted until 1825. 
In New York the young tragedian Cooper retrieved 
the fortunes of the Park Theater and made the 
house a paying one for a number of years. In 
Boston, Snelling Powell, a brother of Charles Powell, 
secured control after other attempts had failed, in- 
cluding the assumption of the management of the 
Boston Theater by Charles Whitlock in 1800, John 
Bernard, an English actor of some repute who 
joined the Philadelphia company in 1797, was for 
a while Snelling Powell's associate in directing the 
Federal Street Theater ; but for many years Powell's 
partner was Mr. Dickenson, who was an actor of 
moderate ability, but a man of sound judgment and 
an excellent manager. These were the dominating 
theaters in the United States during the first quarter 
of the century, and their influence in giving tone 
and character to theatrical enterprises in the country 
was felt down to 1850. 

The Old American Company was designed to be 
permanent in organization, but all the early man- 
agers, from Douglass to Wignell and Hodgkinson, 
aimed at controlling a circuit of playhouses modeled 
after the provincial circuits in England. The build- 
ing of the new theaters in Philadelphia, New York, 
and Boston resulted in giving companies that were 
permanent in organization permanence of home. 
These were the real stock-company days, but a 
tendency toward the star system was manifested 
almost from the outset. As early as 1796 Mrs. 
Whitlock played what was essentially a star engage- 
ment at the Boston Theater ; it was limited to twelve 
nights, for which she was paid $450 and allowed a 
benefit. Hodgkinson played star engagements in 
all the leading cities between 1798 and 1805, and 
Cooper followed Hodgkinson's example, and was a 
star from youth to old age. But the first star to 
shine with extraordinary effulgence in the American 
theatrical firmament was George Frederick Cooke. 
He was the first English actor of great reputation 

who came to America to play the leading roles of 
tragedy and comedy with the stock companies in 
the principal cities. In view of this the star system, 
as it ruled in the American theaters for the next 
half-century, may be said to date from his appear- 
ance here in 1810-11. 

Simultaneously with Cooke's performances in the 
theaters of Philadelphia, New York, and Boston 
were the star engagements of our own "young 
Roscius" — John Howard Payne. Cooke played 
three engagements in Philadelphia — in all thirty-nine 
nights. His highest receipts for any one night were 
$1475, his lowest $474. His average for his last 
Philadelphia engagement of twelve nights in 181 1 
was $807.50. Payne played to an average about 
the same time of $442, while Cooper's Philadel- 
phia average was $509. Young Payne's popular- 
ity rapidly diminished, and in 181 2 he performed 
to receipts that fell as low as $255. After Cooke 
the next English star to appear in America was 
Holman, in 181 2 ; but he came at a time of serious 
depression in consequence of the war with Great 
Britain, and the impression that he made fell far 
below his expectations. Then came Incledon and 
PhiUips as musical stars, and after them the Wal- 
lacks, Henry and James W., and finally, to close the 
first decade of the star system in America, 1810-20, 
Edmund Kean. The great English stars who came 
to this country during the next three decades were 
Junius Brutus Booth and William Charles Macready, 
1820-30; Fanny Kemble and her father, Charles 
Kemble, and Charles Kean, 1830-40; and Tyrone 
Power, James R. Anderson, and Macready, again in 
the fullness of his fame, 1840—50. This long period 
had developed only two American stars of sur- 
passing brilliancy — Edwin Forrest and Charlotte 

The century opened with about half a score of 
theaters in the leading American cities, only three 
of which, as already described, were worthy of the 
name or of the drama. Between 1800 and 1850 
about twenty theaters were built in New York, none 
of them superior to the Park, and only one, the 
Bowery, in any sense its rival, until Burton estab- 
lished himself in Chambers Street in the last decade 
of the epoch. The only new theaters of importance 
in Philadelphia during the same period were the 
Walnut Street and the Arch Street theaters, the 
former erected for a circus in 1808 and fitted up for 
theatrical uses in 1820, and the latter built in 1826. 
The theaters built in Boston in these fifty years were 
the Tremont, the American Amphitheater, — after- 
ward the Warren and National,— Kimball's Museum, 



the Eagle, and the Howard Athenaeum. Baltimore 
had nothing better than the old Holliday Street 
Theater during this epoch, and Washington was 
without a place of amusement worthy of the drama 
until 1835. The theater builder of the period in the 
South and Southwest was James H. Caldwell. He 
built the American Theater in New Orleans in 1823, 
and afterward erected the Camp Street and Charles 
Street theaters. Mr. Caldwell also built theaters in 
Cincinnati, St. Louis, Natchez, Huntsville, Nash- 
ville, and Petersburg. Another manager, John S. 
Potter, was concerned in building as many, or more, 
theaters in the South and Southwest ; but, after all, 
the theatrical activity of a century resulted in an 
approximate number of theaters in actual use at its 
close not exceeding fifty. 

The figures that show the periods of prosperity 
and the intervening periods of depression are not 
easily obtainable, those that are in existence being 
widely scattered through books and newspapers or 
in private hands. The losses were sometimes heavy 
even in the early enterprises. The Philadelphia 
company in 1797 played fourteen weeks in New 
York with a loss of $2350 ; but, on the other hand, 
Caldwell, in 181 8, cleared $10,000 in four months 
at Petersbiu-g, Va. The receipts of the Park 
Theater, New York, for the season of 1832-33 
reached nearly $150,000, Fanny Kemble and her 
father drawing $56,000 for sixty nights, an average 
of $933 per night. In 1833-34, when the receipts 
at the Park fell to $135,000 for the season, the 
Kembles averaged $732 per night; but in 1834-35, 
without the Kembles, the season's total was over 
$160,000. At this time the star system was at its 
height of favor, with both managers and the public ; 
but its effects were disastrous in cities where there 
were rival theaters outbidding one another for the 
best stars. This was especially true of the managers 
of the three rival theaters in Philadelphia, who for 
nearly twenty years continued to cut one another's 
throats for the benefit of stars of no great magnitude. 
Wood, in his " Recollections," cites an example of 
the effects of the system. One of Fanny Ellsler's 
engagements in Philadelphia yielded $10,869.25, 
out of which the danseuse received $6436. The 
money paid to the other dancers, the ballet, and for 
the ordinary expenses of the house brought the ex- 
penditures up to $11,826, involving a loss to the 
manager of $1000 for ten nights. This system 
finally culminated about 1846, when nearly all the 
theaters in the country were ruined. But it was 
divided patronage as well as the excessive percen- 
tages of the stars that made the theaters in Philadel- 

phia, New York, and Boston unprofitable ; for in the 
South, where Caldwell had a monopoly in his own 
field from Richmond to New Orleans, the profits 
were very large, notwithstanding the frequent en- 
gagement of